Accounting for revenue using an accountability and business model framework: The case of the South African Institute of Chartered Accountants’ professional examinations

Warren Maroun

South African Journal of Accounting Research, 2017, vol. 31, issue 3, 240-254

Abstract: This research adopts a normative approach. It builds on the academic literature which argues that the usefulness of financial reporting can be enhanced by aligning accounting for balances and transactions with an organisation’s business model, as presented in its integrated report. This is done using examination fees collected by the South African Institute of Chartered Accountants (SAICA) as an example. The research demonstrates how SAICA’s business model can be used to inform the identification of contracts with customers; the definition of performance obligations and conclude on the timing of revenue recognition under IFRS 15: Revenue from Contracts with Customers. In turn, this provides a useful practical example of how, in general terms, an organisation’s business model can be used to provide a more transparent account of financial performance. The research also makes an important contribution by showing how, without requiring amendments to existing accounting standards, financial reporting can be informed by details on the value creation process explained in a company’s integrated report.

Date: 2017
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DOI: 10.1080/10291954.2016.1205248

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