Chapter - Revenue. After completing this chapter you should be able to: Apply the revenue recognition principle, describe accounting issues for revenue recognition at point of sale, apply the percentage-of-completion method for long-term contracts, apply the completed-contract method for long-term contractsand other contents. | Volume 2 C H A P T E R 18 REVENUE Intermediate Accounting IFRS Edition Kieso, Weygandt, and Warfield Apply the revenue recognition principle. Describe accounting issues for revenue recognition at point of sale. Apply the percentage-of-completion method for long-term contracts. Apply the cost-recovery method for long-term contracts. Identify the proper accounting for losses on long-term contracts. Describe the accounting issues for service contracts. Identify the proper accounting for multiple-deliverable arrangements. Learning Objectives Current Environment Guidelines for revenue recognition Departures from sale basis Revenue Recognition (At Point of Sale) Revenue Recognition (Long-Term Contracts) Revenue Recognition (Other) Measurement Recognition Summary Service contracts Multiple-deliverable arrangements Other Summary of methods Percentage-of-completion method Cost-recovery method Long-term contract losses Disclosures Revenue Restatements for improper revenue recognition are relatively common and can lead to significant share price adjustments. Revenue recognition is a top fraud risk and regardless of the accounting rules followed (IFRS or . GAAP), the risk or errors and inaccuracies in revenue reporting is significant. The Current Environment Revenue recognition principle: Revenue is recognized Guidelines for Revenue Recognition The Current Environment LO 1 Apply the revenue recognition principle. when it is probable that the economic benefits will flow to the company and when the benefits can be measured reliably. Sale of product from inventory Type of Transaction Rendering a service Permitting use of an asset Sale of asset other than inventory Date of sale (date of delivery) Services performed and billable As time passes or assets are used Date of sale or trade-in Gain or loss on disposition Revenue from interest, rents, and royalties Revenue from fees or services Revenue from sales . | Volume 2 C H A P T E R 18 REVENUE Intermediate Accounting IFRS Edition Kieso, Weygandt, and Warfield Apply the revenue recognition principle. Describe accounting issues for revenue recognition at point of sale. Apply the percentage-of-completion method for long-term contracts. Apply the cost-recovery method for long-term contracts. Identify the proper accounting for losses on long-term contracts. Describe the accounting issues for service contracts. Identify the proper accounting for multiple-deliverable arrangements. Learning Objectives Current Environment Guidelines for revenue recognition Departures from sale basis Revenue Recognition (At Point of Sale) Revenue Recognition (Long-Term Contracts) Revenue Recognition (Other) Measurement Recognition Summary Service contracts Multiple-deliverable arrangements Other Summary of methods Percentage-of-completion method Cost-recovery method Long-term contract losses .
