Ch 6 \u2013 REVENUE REC Lesson Plan(1).docx - Chapter 6 REVENUE RECOGNITION General topics and issues to understand Goods and\/or services Bundled

Ch 6 u2013 REVENUE REC Lesson Plan(1).docx - Chapter 6...

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Chapter 6 – REVENUE RECOGNITION General topics and issues to understand: Goods and/or services Bundled goods/services (multiple performance obligations for 1 selling price) pg 289. Market approach or Expected cost plus margin or Residual approach Reciprocal Consideration (what the seller receives in exchange for the goods and/or services provided); if receive a bartered good or service or a non-monetary asset then value the sale at the fair value of whatever was received as consideration; if consideration is variable then use expected value or most likely amount; discount if greater than 1 year Arm’s length vs related party sales Credit risk – the risk that the customer will not pay; may have to defer recognition of revenue Commercial substance – if no then cannot recognize revenue Concessionary terms – may create additional obligations that affect the measurement/value uncertainty; may indicate no revenue can be recognized yet Contractual & Constructive obligations – all must be considered and recognized when recording the transaction New IFRS 15 Revenue from Contracts with Customers pg 280 This is an Asset/Liability Approach

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