Sab 104

2399 WordsFeb 17, 201110 Pages
CASE STUDY 3 SEC STAFF ACCOUNTING BULLETIN 104-REVENUE RECOGNITION Required: 1. Access the SEC website,, and open the Staff Accounting Bulletin (SAB) section to SAB104. Disregard the first 8 pages. 2. List the 4 criteria which the SEC decided was necessary to further clarify the basic revenue accounting concepts of “realized or realizable and earned”. • Persuasive evidence of an arrangement exists • Delivery has occurred or services have been rendered • The seller’s price to the buyer is fixed or determinable • Collectability is reasonably assured 3. Why do you believe it was necessary for the SEC to provide this detailed guidance beyond basic concepts? I believe that it was necessary…show more content…
Customers may test the delivered products; require the seller to perform additional services subsequent to delivery (install/activate equipment) or to do other work before acceptance. o Formal customer sign off is not always necessary; o 4 Forms of customer acceptance provisions ▪ Trial/Evaluation • Customer may not agree to purchase until they can try it or the passage of time may define their
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