Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Business
Revenue Recognition – Milestone Method (Topic 605) 2010 Amendment: From The R&D Industry Perspective, Sofia I. Tent
Revenue Recognition – Milestone Method (Topic 605) 2010 Amendment: From The R&D Industry Perspective, Sofia I. Tent
Honors Theses
This paper examines the Revenue Recognition – Milestone Method (RRMM), FASB codification amendment of 2010 and its effect on the health of firms heavily dependent on the Research and Development (R&D), as evidenced by the operating profit margin. By utilizing a two-stage OLS model developed by Lev and Sougiannis (1996), this study measures the effect of the adoption of the RRMM on operating profit margin. The sample includes U.S. firms with significant R&D expenses (a R&D expenses/Sales ratio greater than 2%) for the years 2006-2013. Due to the more rapid recognition of income using the RRMM, I expect the operating …