Question

1. From the FASB, what is the intended purpose of the new converged revenue recognition standard?

2.How prevalent is sustainability reporting in (a) the U.S. and (b) globally? In citing specific statistics, indicate the size of the company to which the information pertains.

3. What standards or guidelines should accounting professionals involved in sustainability reporting be familiar with?

Answer 1

1. New converged revenue recognition standard is to establish principles to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue from contracts with customers. The new guidance:

• Removes inconsistencies and weaknesses in existing revenue requirements
• Provides a more robust framework for addressing revenue issues
• Improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets
• Provides more useful information to users of financial statements through improved disclosure requirements, and
• Simplifies the preparation of financial statements by reducing the number of requirements to which an organization must refer.

2.The purpose of this study is to investigate the factors that impact (1) Global Reporting Initiative-based sustainability reporting, (2) the adoption of assurance statements in sustainability reports, and (3) the application levels of sustainability reports. Moreover, (4) the paper examines whether sustainability reporting is value relevant or not based upon the sample provided by 297 Turkish publicly traded companies at the Borsa Istanbul. The findings revealed a growing awareness of Global Reporting Initiative -based sustainability reporting among the investigated corporations, and an improving trend in report quality; however, having sustainability reports assured by an independent verifier is not widespread among them. Using the basis of ten formulated hypotheses, the empirical evidence yielded significant results, which explain the driving factors behind sustainability reporting. Moreover, the results confirmed that sustainability reporting is value relevant.

3.

In particular, the International Integrated Reporting Committee (IIRC) is currently piloting its methodology for companies to produce one combined financial, environmental and governance report that can illustrate how they are creating value over time. There are also new reporting tools being developed, with particular interest focused on the US-based Sustainability Accounting Standards Board (SASB), which is developing sector-specific key performance indicators to appeal to the financial markets.

Sutainability practitioners need to get to know these new frameworks and understand how they relate to each other. This is important. While financial analysts like clarity and common metrics, so they can benchmark performance, it is also vital that companies take the time to think through their specific societal impacts and build relevant associated KPIs.