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Accounting Principles Board (APB) Opinion No.
10
a.
Omnibus Opinion
b. Issued in December 1966
c.
APB Opinion No. 10 replaces
ARB No. 43, Chapter 3B
APB Opinion
No. 10 addresses 7 topics:
1.
Consolidated financial statements (Amendment to ARB No. 51)
--> deleted by APB Opinion No.
18.
2.
Pooling of interests - Restatement of Financial Statement
--> deleted by APB Opinion No.
16.
3. Tax
allocation accounts - Discounting
Deferred taxes (Inter-period tax allocations)
--> should NOT be reported
on a discounted basis.
4.
Offsetting securities against taxes payable
Cash and other assets
-->
should not be offset against tax liability.
Securities issued by government
-->
should not be
deducted from taxes payable
on the balance sheet.
Only exception
-->
government issued securities
specifically designated as being acceptable
for the payment of taxes of those governments.
5.
Convertible debt and debt issued
with stock warrants
--> amended by
APB Opinion No.
12.
--> deleted by
APB Opinion No.
14.
6.
Liquidation preference of preferred stock
--> deleted by
SFAS No. 129.
7.
Installment method of accounting
Revenues are ordinarily recognized
-->
when a transaction is
completed
--> with appropriate provision for
uncollectible accounts.
Installment
method of recognizing revenue
--> is
not
acceptable, with the following exception.
When the following conditions are met,
--> either
installment method
--> or cost
recovery method may be used.
Conditions
--> receivables
are collectible over an extended period of time
-->
no reasonable basis
for estimating the degree of collectibility
Cost Recovery Method
-->
same
amounts of revenue and expense are recognized
-->
as collections are made
--> until all costs have been
recovered.
--> recognition of profit is
postponed until all costs are recovered.
Overview of Revenue
Recognition Principle
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