ch07 - Chapter 7-1 Chapter 7-2 CHAPTER 7 REVENUE...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 7-1 Chapter 7-2 CHAPTER 7 REVENUE RECOGNITION INTERMEDIATE ACCOUNTING INTERMEDIATE ACCOUNTING Principles and Analysis Principles and Analysis 2nd Edition 2nd Edition Warfield Warfield Weygandt Weygandt Kieso Kieso Chapter 7-3 1. Apply the revenue recognition principle. 2. Describe accounting issues involved with 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. Describe the installment-sales and cost-recovery methods of accounting. Learning Objectives Learning Objectives Chapter 7-4 Current Current Environment Environment Guidelines for Guidelines for revenue revenue recognition recognition Departures from Departures from sale basis sale basis Revenue Revenue Recognition at Recognition at Point of Sale Point of Sale Revenue Revenue Recognition before Recognition before Delivery Delivery Revenue Revenue Recognition after Recognition after Delivery Delivery Sales with Sales with buyback buyback agreements agreements Sales when right Sales when right of return exists of return exists Trade loading Trade loading and channel and channel stuffing stuffing Installment-sales Installment-sales method method Cost-recovery Cost-recovery method method Deposit method Deposit method Summary of Summary of bases bases Percentage-of- Percentage-of- completion completion method method Completed- Completed- contract method contract method Completion-of- Completion-of- production basis production basis Revenue Recognition Revenue Recognition Chapter 7-5 One study noted restatements of revenue: Result in larger drops in market capitalization than other types of restatement. Caused eight of the top ten market value losses in a recent year. Of the ten companies, the leading three lost $20 billion in market value in just three days following disclosure. Revenue recognition has been the largest source of public company restatements over the past decade. The Current Environment The Current Environment Market capitalization: # common shares x market price Chapter 7-6 The revenue recognition principle provides that companies should recognize revenue Guidelines for Revenue Recognition The Current Environment The Current Environment LO 1 Apply the revenue recognition principle. LO 1 Apply the revenue recognition principle. (1) when it is realized or realizable and (2) when it is earned . Chapter 7-7 Sale of product from inventory Type of transaction Rendering a service Permitting use of an asset Sale of asset other than inventory Date of sale (date of delivery) Services performed and billable As time passes or assets are used Date of sale or trade- in Gain or loss on disposition Revenue from interest, rents, and royalties Revenue from fees or services Revenue from sales Description of revenue Timing of revenue recognition The Current Environment The Current Environment LO 1 Apply the revenue recognition principle....
View Full Document

Page1 / 41

ch07 - Chapter 7-1 Chapter 7-2 CHAPTER 7 REVENUE...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online