AAA Spark Meeting of the Regions

Revenue Recognition Restatements—Do the Revenue Recognition Footnotes Also Change?

• In Event: Topics in Corporate Disclosure

Abstract

To be useful, revenue recognition footnotes must adequately describe GAAP-complaint methods. They must be informative and so ambiguous to describe non-GAAP complaint revenue recognition methods. Our study investigates the patterns in the revenue recognition footnotes following financial statements in which the revenue recognition method was a problem. We analyze the changes in the revenue recognition footnote across four points in time surrounding the financial statement that had to be restated using the 10-K filings. We find that the revenue recognition footnotes may not be very useful to investors.

Authors

• Yu Ho Chi, The University of Tennessee at Martin

• David A. Ziebart, University of Kentucky