17 download_doc-10.php

17 download_doc-10.php - A311(2/24/2009)

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A311 (2/24/2009) Sale in exchange for non-cash consideration (due in ≤ 1 year): V(non-cash payment due ≤ 1 yr) = V(Prod Sold)    FMV of (for example) other       FMV of Prod Sold       products, equip, etc. HEP is clearer of the FMVs Sale in exchange for consideration due over time (> 1 year): V(consideration receivable over > 1 yr) = V(Prod Sold)           * * Usually the clearer FMV; notice this means…. FMV 0    C 0 •R* -0  + C 1 •R* -1  + …. + C T •R* -T contractually-required consideration transfers Identity determining r* = R*–1, the implicit interest rate on the contract (which determines  interest revenue on the contract). If FMV of Products Sold is not  clear, then its necessary to estimate  the risk-adjusted discount  rate on the contract to solve for FMV 0  (=HEP on the exchange) Revenue Recognition Principle . For potential dates at which to recognize revenue:
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17 download_doc-10.php - A311(2/24/2009)

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