chapter 18

chapter 18 - CHAPTER 18 18 REVENUE RECOGNITION...

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Chapter 18-1 C H A P T E R C H A P T E R 18 18 REVENUE RECOGNITION REVENUE RECOGNITION Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield
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Chapter 18-2 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 accounting. Learning Objectives Learning Objectives
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Chapter 18-3 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. Revenue recognition has been the largest source of public company restatements over the past decade. The Current Environment The Current Environment
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Chapter 18-4 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) earned .
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Chapter 18-5 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 Chapter 18 Chapter 18 The Current Environment The Current Environment LO 1 Apply the revenue recognition principle. LO 1 Apply the revenue recognition principle. Illustration 18-1 Revenue Recognition Classified by Type of Transaction
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Chapter 18-6 Earlier recognition is appropriate if there is a high degree of certainty about the amount of revenue earned. Delayed recognition is appropriate if the degree of uncertainty concerning the amount of revenue or costs is sufficiently high or sale does not represent substantial completion of the earnings process. Departures from the Sale Basis The Current Environment The Current Environment LO 1 Apply the revenue recognition principle. LO 1 Apply the revenue recognition principle.
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Chapter 18-7 Revenue Recognition Alternatives The Current Environment The Current Environment LO 1 Apply the revenue recognition principle. LO 1 Apply the revenue recognition principle. Illustration 18-2
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Chapter 18-8 FASB’s Concepts Statement No. 5 , companies usually meet the two conditions for recognizing revenue by the time they deliver products or render services to customers.
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This note was uploaded on 02/04/2011 for the course ACC 630 taught by Professor Mcarthy during the Spring '09 term at St. John's.

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chapter 18 - CHAPTER 18 18 REVENUE RECOGNITION...

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