Research On Revenue Recognition Of Online Game Companies Based On New Revenue Guideline As A Case Of 37 Interactive Entertainment

In July 2017,the China's Ministry of Finance promulgated the revised revenue guideline.This revenue guideline has established a unified model for the recognition of revenue,which has affected the timing of revenue's recognition in many industries,including the online game enterprises,which was developing rapidly in recent years.As an emerging industry in the Internet economy,the transactions of online game enterprises is particular and complex,which takes challenges to the implementation of the new revenue guideline.The new revenue guideline is principle-oriented,and there is no confirmed standard for the specific industries and businesses.How to apply the new revenue guideline reasonably is the major challenge for the online game enterprise.The case analysis method and the literature reading method are used to combine the theory with practice.Based on the basic theories of accounting and the new revenue guideline,the quo of revenue's recognition in online game companies was analyzed,and the characteristics were concluded.It is difficult to determine the price and the timing of revenue's recognition for the virtual goods.Besides,the virtual currency can produce precipitation.Based on these characteristics,the mainly factors were confirmed while the revenue's recognition of 37 Interactive Entertainment was discussed.Combined with the new revenue guideline,the following problems were found.Different model of revenue's recognition will lead different financial data,which will increase the risk of financial fraud.The processing of precipitation's income may make difference between the financial statements and the actual situation.It is difficult to judge the separate price of accumulate points,virtual items and the virtual currency.This study suggested that 37 Interactive Entertainment choose the UBRM model to recognize revenue.Combined with the study of 37 Interactive Entertainment,this paper made suggestions that online game enterprise should allocate the revenue reasonably for the promotional products and the revenue's recognition of virtual currency's precipitation.The new revenue guideline should combine principle and regularity.The informational disclosure of online game companies should be valued.The model of revenue's recognition for online game companies should be unified.Combined with the case of 37 Interactive Entertainment,this article discussed revenue's recognition of online game companies under the new revenue guideline and made some suggestions for online game companies,which were exercisable and practical.