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 contracts....and other contents.
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C H A P T E R 18
Intermediate Accounting IFRS Edition
Kieso, Weygandt, and Warfield
1. Apply the revenue recognition principle.
2. Describe accounting issues for revenue recognition at point of sale.
3. Apply the percentage-of-completion method for long-term contracts.
4. Apply the cost-recovery method for long-term contracts.
5. Identify the proper accounting for losses on long-term contracts.
6. Describe the accounting issues for service contracts.
7. Identify the proper accounting for multiple-deliverable arrangements.
Guidelines for revenue recognition
(At Point of Sale)
Revenue Recognition (Long-Term Contracts)
Long-term contract losses
The Current Environment
Revenue recognition is a top fraud risk and regardless of the accounting rules followed (IFRS or U.S. GAAP), the risk or errors and inaccuracies in revenue reporting is significant.
Restatements for improper revenue recognition are relatively common and can lead to significant share price adjustments.