TAILIEUCHUNG - Issues in Financial Accounting (20)

PART II: Corporate Accounting Concepts and . Issues Lecture 20. Revenue Recognition Instructor. Adnan Learning. Learning Objectives. Objectives 1. Apply the revenue recognition principle. 2. Describe accounting issues for revenue recognition at point of. sale. 3. Apply the percentage-of-completion method for long-term. contracts. 4. Apply the completed-contract method for long-term contracts. 5. Identify the proper accounting for losses on long-term contracts. 6. Describe the installment-sales method of accounting. 7. Explain the cost-recovery method of accounting2 Revenue. Revenue Recognition. Recognition Revenue Revenue Revenue. Current. Recognition at the Recognition Recognition after. Environment. Point of Sale before Delivery Delivery Guidelines for Sales with Percentage-of- Installment-sales. revenue discounts completion method. recognition Sales with right of method. return Cost-recovery. Departures from Sales with Completed- method. sale basis buybacks contract method. Deposit method. Bill and hold sales Long-term. Summary of. Principal-agent contract losses. relationships bases. Trade loading and Disclosures. channel stuffing Completion-of-. Multiple-deliverable production basis. Realization. Realization Principle. Principle Revenues are inflows or other enhancements of assets of an. entity or settlements of its liabilities (or a combination of both).from delivering or producing goods, rendering services, or other. activities that constitute the entity’s ongoing major or central. operations Record revenue when:.4 Realization. Realization Principle. recognition is often tied to delivery of. the product from the seller to the buyer5 The. The Current. Current Environment. Environment Revenue recognition is a top fraud risk and regardless. of the accounting rules followed (IFRS or . GAAP),. the risk or errors and inaccuracies in revenue reporting is. significant. Restatements for improper revenue recognition are. relatively common and can lead to significant share price. adjustments6 The. The Current. Current Environment. Environment Guidelines for Revenue Recognition. The revenue recognition principle provides that. companies should recognize revenue (1) when it is realized or realizable and (2) when it is earned7 LO 1 Apply the revenue recognition principle. The. The Current. Current Environment. Environment. Revenue Recognition Classified by Type of Transaction. Type of

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• Issues in economics today
• Lecture Issues in economics today
• Macroeconomic issues
• International issues
• Price control issues
• Opportunity cost
• Demand model
• Elasticity of demand
• Firm production
• Perfect competition
• Gross domestic product
• Federal spending
• Fiscal policy
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• Flaws in the CPI
• International trade
• International monetary fund
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• Economic models of health care
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• Prescription drugs
• Economics of crime
• Human capital
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• Head start
• Affirmative action