Kieso_Inter_13e_Ch18

Kieso_Inter_13e_Ch18 - 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 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. (1) when it is realized or realizable and (2) earned .
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Chapter 18-3 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.
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Chapter 18-4 Revenue Recognition Alternatives The Current Environment The Current Environment LO 1 Apply the revenue recognition principle. Illustration 18-2
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Chapter 18-5 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. Departures from the Sale Basis Revenue Recognition at Point of Sale (Delivery) Revenue Recognition at Point of Sale (Delivery) LO 2 Describe accounting issues for revenue recognition at point of sale. Implementation problems, Sales with Buyback Agreements Sales When Right of Return Exists
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Chapter 18-6 When a repurchase agreement exists at a set price and this price covers all cost of the inventory plus related holding costs, the inventory and related liability remain on the seller’s books. In other words, no sale. Sales with Buyback Agreements Revenue Recognition at Point of Sale (Delivery) Revenue Recognition at Point of Sale (Delivery) LO 2 Describe accounting issues for revenue recognition at point of sale.
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Chapter 18-7 Recognize revenue only if six conditions have been met. Sales When Right of Return Exists Revenue Recognition at Point of Sale (Delivery) Revenue Recognition at Point of Sale (Delivery) LO 2 Describe accounting issues for revenue recognition at point of sale. 1. The seller’s price to the buyer is substantially fixed or determinable at the date of sale. 2. The buyer has paid the seller, or the buyer is obligated to pay the seller, and the obligation is not contingent on resale of the product. 3. The buyer’s obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product.
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Chapter 18-8 Recognize revenue only if six conditions have been met. Sales When Right of Return Exists Revenue Recognition at Point of Sale (Delivery) Revenue Recognition at Point of Sale (Delivery) LO 2 Describe accounting issues for revenue recognition at point of sale.
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This note was uploaded on 03/08/2011 for the course ACCT 3220 taught by Professor Hollie,dana during the Summer '08 term at Colorado.

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Kieso_Inter_13e_Ch18 - CHAPTER 18 18 REVENUE RECOGNITION

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