The Impact Of The Revision Of The Income Standard On The Measurement Of Revenue Recognition Of Software Companies In China

Revenue is the source of corporate profits,the scale of income is a direct reflection of the business performance situation to a certain extent.Therefore,how to confirm the income and how to measure it normatively has been payed high attention by the accounting standards development agencies.But the current IFRS and GAAP confirm the income is on the basis of different trade-form of the economic activities.IASB and FASB have set up the union group to revise the income criterion in the early 2002 for the purpose of solving the contradiction of the income concept between the international accounting standards and the USA accounting standards,and it finally release the latest IFRS 15 which “originate from the income of customer contract” in the Feb.2014 through ten years.About how to confirm the income and how to measure it normatively in China is reflected in the 14 thand 15thAccounting standard for business enterprises which was released in Feb.2006.Along with the social economic development,the complexity of trade matters between the subjects is much more obvious,it means that we need to review the principle of the current accounting standard for business enterprises to confirm and measure the income.We also adhere to follow the IFRS' trend,and the ministry of finance has released The 14 thAccounting Standard For Business Enterprises--Income Revision(exposure draft)in Dec.2015.Enterprises in China must predict the influence of revising the income standards to the accounting practice due to the new standards' implement,and they also have to make a appropriate decision to face the change and the challenge.The software industry has its own particularity compared with other industries.The a sset types,nature of work,foreign trade and other industries are different with other indu stries.In general,enterprises always use the measure combining the nature with the characteristics of the specific business and refer to the related principles to confirm the income by themselves.So they will meet a lot of difficulties and problems which can not be predicted,,and this will become a challenge to the current income standards.CAS14 Revision put forward the "contract" as the basis to confirm the income point of view,and introduce a new revenue model to confirm the income.It means that the adoption of new revenue model will change the time and amount in the software business,which will affect business performance indicators or tax and other business,and it will bring a huge impact and challenges to the software enterprises accounting subjects.In order to solve these problems,this paper discusses the principal differences between the current accounting standards and the new accounting standards of the income model,and we start from X software company analyses different income confirming measures of the standards specification.This paper finds it will bring a huge impact to income confirming time and amount of the enterprises by using new income model refers to the CAS14 Revision.Therefore,enterprises should make plans for this situation in time.At the same time,the government also needs to formulate the relational operation standards.