Comparison of old and new revenue recognition criteria and countermeasures——Take Evergrande Real Estate Group Co., Ltd. as an example

Abstract

In the current social development, transaction mode is constantly having to bring out the old, and the step and method of revenue recognition is becoming more and more complex. So the defects of the original income criterion are exposed gradually. In order to comply with the trend of Chinese economic development and perfect our accounting information standard, the Ministry of Finance made an innovation income recognition criterion decision. Therefore, the Accounting Standards for Business Enterprises No.14 Revenue (Finance and Accounting [2017] No.22) was released in July 2017. Compared with the original revenue recognition standards, the adjustment between the two standards and the revenue recognition standards in international financial reports basically converge, and the requirements for the way, time or time of revenue recognition of enterprises are significantly improved. Income is a very important indicator to evaluate the profitability of an enterprise in the process of operation, so the recognition and measurement of income is very important. The purpose of this study is to compare the differences between the old and new revenue recognition criteria, propose solutions to the problems, and clearly define how real estate enterprises recognize revenue under the new standard, what impact it will bring to real estate enterprises in practice, and what aspects real estate enterprises should pay attention to under the revised revenue criteria. This paper will also have a reference for other enterprises.