Research On The Application Of New Income Criterion In G Real Estate Enterprise Ⅰ Project

In May 2014,IASB and FASB issued the International Accounting Standards No.fifteenth-customer contract income(IFRS 15).In order to converge with the international accounting standards,China set up the revenue standard revision group,and officially promulgated"Accounting Standards No.14-income"(2017)on July 5,2017,which has been implemented since January 1,2018.The real estate industry is one of the most significant industries in the economic environment of China.A project can generate huge profits.The profit of real estate enterprise mainly comes from the income.Only by correctly dealing with the recognition and measurement of the income of the real estate enterprise can it accurately reflect the profit situation of the real estate enterprise.When adopting the old income criterion,the income of the real estate enterprise is recognized at a certain point.At present,the income of real estate enterprises has three main points:completion and acceptance,actual delivery and transfer of property rights.No matter which time the real estate enterprise adopts to recognize the income,it will appear that the enterprise has no income in the previous accounting period,and the income is recognized centrally in the last accounting period,which leads to the big change of the income.As the business model of the real estate industry is constantly changing,the old income criterion is more and more unable to meet its business processing requirements and faces great difficulties and challenges.The new income standard standardizes the standard of income recognition,and adopts "transfer of control rights" to instead of "risk and reward transfer" of the old standard,which improves the quality of accounting information.This paper uses case study method,comparative analysis method and other research methods.Taking G real estate enterprise I project as an example,this paper studies the application of new income criterion in real estate enterprise,analyzes how the new income criterion improve the problems of the old standard in the I project and gives the corresponding countermeasures.First of all,this paper introduces the main contents of the new income criterion in detail:the "five-step"revenue recognition model,contract cost,presentation and related disclosure,the definition of income recognition basis,the definition of income recognition conditions,the definition of revenue recognition amount,the definition of income recognition measurement,the comparison between new and old income criteria in income recognition and income measurement.Secondly,this paper analyzes the background of Real Estate Industry and the main contents of G Real Estate Enterprise I Project.Then,using the old and new income criteria to recognize the revenue of G real estate enterprise’s I project.According to the analysis,when adopting the old criteria,the revenue is recognized at the time of completion and delivery of the project;while adopting the new criterion,the revenue is recognized over a period of time according to the schedule of performance of the project.In the course of this analysis,it points out that the problems existing in the application of the old standards,such as large fluctuations in income and profits,inconsistent changes in income and cash flow,weaken the quality of relevant accounting information,and incomplete disclosure of statements,etc.It also explains the improvement of these problems by applying the new income criterion.It points out the difficulties existing in the application of the new criterion,and gives the countermeasures.Based on the analysis of the results of adopting the new income criterion for the I project,this paper thinks that the new standard solves the problem of income recognition of real estate enterprises,improves the financial information of G enterprise,and is beneficial to enterprise managers,investors and other users of financial information make the right decision.However,it involves a large number of accounting estimates and subjective judgment of accountants when recognize and measure the income of I project,so the new standards will reduce the financial information caution to a certain extent.Therefore,when judging whether a real estate development project recognizes income at a certain point or within a certain period of time,the accountant should carefully study the relevant provisions of the contract and the legal provisions of the site of the project.Only in this way can real and accurate income be recognized.