Scott Page 52 Question 22

According to the CICA handbook section 3400 and IFRS IAS 18, the gross from the change of the goods shall be recognise when the entity has been transferred to the buyer the significant risk and rewards of ownership of the goods. The relevance and dependableness trade-off relationship is also involved in tax income enhancement experience. The relevance will development when the tax revenue is recognized early. When the future expected cash flow is predicted early, this intimacy increase the relevance of revenue information. The most relevant prime of revenue recognition is the earlier load of the entity transferring procedure. Manufacturing firms: The earlier point is the start of the manufacturing process. It may even apply to when the manufacturer bribe the unrefined material. Oil and ball up exploration firms: The reserve recognition explanation (RRA) has been used to prove oil and gas reserves at their present values. The earliest point is when oil a nd gas reserves atomic number 18 proven. Retail firms: The earliest point is when the goods are purchased from the manufacturer. Firms with semipermanent dumbfounds: CICA handbook section 3400 allow for the use of all a dowery of completion or a finish contract method to recognize the revenue of grand-term contracts.

Under IFRS, languish term contracts must be recognized using the role completion method or the cost recovery method. The earliest point for long-term contracts will be when the contract is signed. The dependability will decrease, as the possibility that the revenue recognized early, may fail to be realized or collected. The reliability of revenue recognitio n reflects the collection of future cash flo! ws. The most certify point is the cash that will be received after on the entity transferred to the buyer. b. Lucent has been overly aggressive in recognition revenue. forswear the definition of revenue recognition from IAS 18, revenue from sale of goods should be recognized when the significant risks and rewards...If you want to get a replete(p) essay, order it on our website: OrderEssay.net

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