Scott Page 52 Question 22

According to the CICA handbook section 3400 and IFRS IAS 18, the gross from the exchange 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 relevancy and dependableness trade-off relationship is also involved in gross enhancement information. The relevance will development when the receipts is recognized early. When the future expected cash flow is predicted early, this cognition increase the relevance of revenue cognizance. The most relevant blame of revenue recognition is the earlier fleck of the entity transferring procedure. Manufacturing firms: The soonest point is the start of the manufacturing process. It whitethorn even apply to when the manufacturer corrupt the unrefined material. Oil and brag 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 an d gas reserves ar 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 realised contract method to recognize the revenue of grand-term contracts.

Under IFRS, dogged 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 reliability will decrease, as the possibility that the revenue recognized early, may fail to be real ized or collected. The reliability of reve! nue recognition reflects the collection of future cash flows. The most licensed point is the cash that will be received later on 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: OrderCustomPaper.com

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