Dugar, A., Gujarathi, M. R. (2018). Toshiba's creative accounting for construction contracts. Issues in Accounting Education, 33(3), 117-134

The FASB and the IASB have issued a joint standard on revenue recognition. Although the standard is not applicable to years discussed in the case, the substantive guidance for accounting on long-term contracts was not changed. Therefore, address all the requirements below, including FASB codification references, in accordance with the new U.S. standard (Toshiba follows U.S. GAAP).

Requirement 1:

1. Are Toshiba's accounting policies for long-term construction contractsas described in the accounting policies section of the caseconsistent with the U.S. GAAP?

Please cite authoritative pronouncements from the Accounting Standards Codification (ASC) to support this. Explanation should focus on Toshiba's choice of accounting policies rather than its implementation of those policies.

Answer rating: 100% (QA)

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