Revenue Recognition Essay

Revenue recognition has been viewed routinely as one of the most difficult finance and accounting processes to get right. It represents one of the highest risks of material error on financial statements, and it is one of the leading causes of restatements. Before May 2014, revenue recognition guidance in U.S.GAAP comprised broad revenue recognition concepts together with numerous revenue requirements for particular industries or transactions, which sometimes result in different accounting for economically

Companies who use an accrual-basis accounting system are supposed to record their revenue according to the standards set by the generally accepted accounting principles (GAAP) for what is revenue recognition. This helps to ensure that each disbursement of cash that is received is applied in a consistent manner. But even though it reduces the likeliness of an error occurring, it doesn't completely guarantee that no mistakes will be made. If there is a change in the accounting staff, or the current

key concept was about revenue from contracts with customers, except for financial instrument contracts, insurance contracts, leasing contracts, nonmonetary exchanges contracts. There are approximately 1,000 comment letters was received. Find one comment letter on the FASB website that raises questions about the proposed new standard and briefly explain the issue. The core principle of the proposed standard on revenue recognition is that a business entity should recognize revenue for goods and services

Revenue Recognition: The Differences and Similarities with IFRS and GAAP Karen Carpenter Revenue is usually the most significant item reported in a company’s financial statements. With bottom lines and cash flows being very important, not only is the company’s reported revenues significant in dollar buy also in weight and importance to the people or business that are investing in them. Revenue recognition is an accounting principal, through GAAP (Generally accepted accounting principles), that

REVENUE RECOGNITION MCDONALD 'S CORPORATION INTRODUCTION McDonald’s and Burger King have been in competition for over 50 years. Similar companies can choose different revenue recognition methods that can cause them to appear different. This report’s purpose is to explain McDonald’s revenue recognition policies and methods in comparison to Burger King’s. DISCUSSION FOR ACCOUNTING POLICIES AND METHODS McDonald’s and Burger King’s revenues mainly consist of two things, sales and franchise fees

The following report is in response to your request for an authoritative answer regarding revenue recognition when a right of return exists. The authoritative literature that addresses the revenue recognition when right of return exists is the FASB codification. More specifically, the section regarding revenue recognition of products. This section discusses the necessary conditions for recognizing revenue when a right of return exists and the factors that may impair the ability to make a reasonable

Implication: The value of revenue recognition will impact the compensation of the top management, and the financial performance of MITS. Analysis: The payable for the year is $136,000, and the draft income statement have bonus for $156,390. The two amount is difference. The bonus should a kind of wage expense for MITS. According to my calculation, the total revenue below $4 million. Therefore, MITS should not be pay the bonus payable in the current year. However, the bonus plan will help the company

Revenue Recognition: Apple Inc. THE COMPANY Our analysis of Apple Inc. will incorporate the general overview of the company and how it records it revenues. We will observe how they make an honest effort to be within compliance of all accounting standards according to the Financial Accounting Standards Board for recording and disclosure of its income. Apple’s leading competitor, Google Inc., will also be examined to see whether they are comparable to Apple and still within compliance of the Securities

The ASU came after much needed clarification regarding revenue recognition. Previously, under United States Generally Accepted Accounting Principles (GAAP), revenue recognition was broad and industry specific (BDO, 2015). This did not allow for ease of comparability between business and industry; which is important to users of financial information. Without comparability, individuals in management and investing would not be able to track a business’s progression year after year, or how they are operating

The revenue recognition principle is a foundation of accrual accounting and one of the main principles of GAAP. The revenue recognition principle is a set of guidelines that helps accountants to identify when a revenue event has taken place and how to appropriately record cash exchanges before, during, and after the revenue event. According to the revenue recognition principal, revenue must (1) be realized or realizable and (2) earned, in order to be recognized. According to the SEC revenue is realized