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Prior to ASU 2014-09 changing the principles underlying revenue recognition, companies recognized revenue when it was earned and realized. The principles of earned and realized were replaced with a core principle which states that companies should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To accomplish this core principle, the FASB and the IASB stated that companies should follow a 5-step process. Required: Discuss the 5-step process that companies should use to accomplish the core principle of revenue recognition.

BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

Solutions

Chapter
Section
Chapter 17, Problem 1C
Textbook Problem

Prior to ASU 2014-09 changing the principles underlying revenue recognition, companies recognized revenue when it was earned and realized. The principles of earned and realized were replaced with a core principle which states that companies should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To accomplish this core principle, the FASB and the IASB stated that companies should follow a 5-step process.

Required:

Discuss the 5-step process that companies should use to accomplish the core principle of revenue recognition.

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Chapter 17 Solutions

Intermediate Accounting: Reporting And Analysis
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Ch. 17 - How should the seller treat promised goods and...Ch. 17 - Are upfront payments considered separate...Ch. 17 - What is the sellers main objective when...Ch. 17 - How should the seller measure revenue when it...Ch. 17 - How does the seller allocate the transaction price...Ch. 17 - What is the best evidence of a goods or services...Ch. 17 - If the standalone selling price of a good or...Ch. 17 - How does a seller satisfy a performance...Ch. 17 - What evidence would suggest that a performance...Ch. 17 - If the sellers performance creates on asset (e.g.,...Ch. 17 - Describe input and output methods used to measure...Ch. 17 - What information must a company disclose about its...Ch. 17 - What types of disclosures must companies make to...Ch. 17 - Under what circumstances does a company recognize...Ch. 17 - How does a company classify the following accounts...Ch. 17 - A company should recognize revenue when a. the...Ch. 17 - A contract between one or more parties creates: a....Ch. 17 - Morgan Company and its customer agree to modify...Ch. 17 - Chlorine Corp. has a contract to deliver pool...Ch. 17 - Orange Construction Company enters into a...Ch. 17 - On July 15, 2019, Matrix Corp. sells 20,000 snow...Ch. 17 - In accounting for a long-term construction...Ch. 17 - On April 1, 2019, Pine Construction Company...Ch. 17 - A customer obtains control over a good or service...Ch. 17 - CustomTee Inc. contracts with various customers to...Ch. 17 - Yankee Corp. agrees to provide Albany Company 24...Ch. 17 - Assume the same facts as in RE17-2. If Yankee...Ch. 17 - East Georgia Community Hospital enters into a...Ch. 17 - LongDrive sells a specialized golf club that has...Ch. 17 - Modine Homes Inc. enters into a contract to design...Ch. 17 - VolleyElite runs a volleyball program consisting...Ch. 17 - Enterprise Solutions Inc. licenses its...Ch. 17 - Assume the same facts as in RE17-8, except that...Ch. 17 - Magical Memories sells Florida theme park vacation...Ch. 17 - On January 1, Morris Company offered a customer a...Ch. 17 - Robotics Inc. contracts with a customer to build a...Ch. 17 - CoolShoes sells its elite tennis shoes to sports...Ch. 17 - Using the information in RE17-13, what journal...Ch. 17 - GameDay sells recreational vehicles along with...Ch. 17 - Clorad Corp. contracts with a customer to...Ch. 17 - Using the information provided in RE17-16, prepare...Ch. 17 - Wells Corp. appropriately determined that...Ch. 17 - Lark Corp. appropriately determined that each of...Ch. 17 - Company enters into a contract with Dearborn Inc....Ch. 17 - Consider each of the following scenarios: a. A...Ch. 17 - On August 1, 2019, Aiken Corp. enters into a...Ch. 17 - On January 1, 2019, Spring Fashions Inc. enters...Ch. 17 - On January 1, 2019, Loud Company enters into a...Ch. 17 - Assume the same facts as in El7-5. On July 1,...Ch. 17 - Assume the same facts as in E17-5 and ignore...Ch. 17 - Sanderson Construction Company provides a variety...Ch. 17 - GrillMaster Inc. sells an industry-leading line of...Ch. 17 - WaterWorld Inc. operates an aquarium and water...Ch. 17 - On January 1, 2019, Crockett Pharmaceuticals...Ch. 17 - Jonas Consulting enters into a contract to provide...Ch. 17 - On March 1, 2019, Elkhart enters into a new...Ch. 17 - On January 5, 2019, ShoeKing Corp. sells for cash...Ch. 17 - On January 1, 2019, Piper Company entered into an...Ch. 17 - On January 1, 2019, Fulton Inc. enters into a...Ch. 17 - On February 1, 2019, Silicon Rentals contracts...Ch. 17 - On December 1, 2019, AwakcAllNight Inc. sells...Ch. 17 - Rix Company sells home appliances and provides...Ch. 17 - Assume the same facts as in E17-19, except that...Ch. 17 - Crazy Computer Store sells a back-to-school bundle...Ch. 17 - Each of the following is an independent situation...Ch. 17 - In 2019, Tarlo Company agrees to construct a...Ch. 17 - King Construction Company began work on a contract...Ch. 17 - Koolman Construction Company began work on a...Ch. 17 - Newberg Construction Corp. contracted to construct...Ch. 17 - Each of the following independent situations...Ch. 17 - JustKitchens Inc. provides services to restaurants...Ch. 17 - On January 1, 2019, ForeRunner Inc. enters into a...Ch. 17 - January 2, 2019, TI enters into a contract with...Ch. 17 - Palantir Corp. sells specialized equipment to the...Ch. 17 - In 2019, Dreyer Corp. began construction work...Ch. 17 - Fender Construction Company receives a contract to...Ch. 17 - SoccerHawk Merchandise Inc. enters into a 6-month...Ch. 17 - Escargot Inc. is a 5-star restaurant in...Ch. 17 - Jorg is building an office building for Wilmington...Ch. 17 - Blackmon Company provides locator services to the...Ch. 17 - Prior to ASU 2014-09 changing the principles...Ch. 17 - The first step in the revenue recognition process...Ch. 17 - Lukes Gameday Company sells a package of goods and...Ch. 17 - One of the more difficult issues that companies...Ch. 17 - After the presentation of your report on the...Ch. 17 - On October 1, 2019, Grahams WeedFeed Inc. signs a...Ch. 17 - On January 1, 2019, Mopps Corp. agrees to provide...Ch. 17 - On November 1, 2019, Olivias Art Shoppe agreed to...Ch. 17 - Revenue for a company is recognized for accounting...Ch. 17 - Village Company is accounting for a long-term...

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