IFRS Case - revenue be recognized when delivery has...

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The first area where there is sufficient information to require a conversion comes in the form of intangible. Traditionally Ruckman, Inc. recognizes intangible assets at costs minus any accumulated depreciation. This directly varies with the IFRS cost allocation and would require a conversion. Ruckman would have to begin to assess their intangible assets for future economic benefit and measure their subsequent reliability. Also, GAAP has the company amortize the cost of the finite intangible asset over its period. However, IFRS requires you to amortize the intangibles at a fair value. The next area where there is sufficient information to require a conversion is revenue. Under US GAAP there is varying criteria to recognize revenue. GAAP requires that
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Unformatted text preview: revenue be recognized when delivery has occurred, there is persuasive evidence of the sale, the fee is fixed and collectability is reasonably assured. However, under IFRS revenue is recognized when risk and reward of ownership has been transferred, the buyer has control of the goods, revenues can be measured reliably, and its possible that economic benefits will flow to the company. When concerning services GAAP has a few specific services that are expressed separately in GAAP. Under IFRS the service revenue may be recognized whenever revenues and costs can be measured reliably, and its probable that economic benefits will flow through to the company....
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This note was uploaded on 08/22/2011 for the course ACIS 3116 taught by Professor Staff during the Spring '11 term at Virginia Tech.

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