Beruflich Dokumente
Kultur Dokumente
Scope
This Standard shall be applied in accounting for revenue arising from the following transactions and events: (a) the sale of goods; (b) the rendering of services; and (c) the use by others of entity assets yielding interest, royalties and dividends.
Measurement of revenue
Revenue shall be measured at the fair value of the consideration received or receivable. It is measured at the fair value of the consideration received or receivable taking into account the amount of any trade discounts and volume rebates allowed by the entity.
Sale of goods
Revenue from the sale of goods shall be recognised when all the following conditions have been satisfied: (a) the entity has transferred to the buyer the significant risks and rewards of ownership of the goods; (b) the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (c) the amount of revenue can be measured reliably; (d) it is probable that the economic benefits associated with the transaction will flow to the entity; and (e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of services
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction shall be recognised by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: (a) the amount of revenue can be measured reliably; (b) it is probable that the economic benefits associated with the transaction will flow to the entity; (c) the stage of completion of the transaction at the end of the reporting period can be measured reliably; and (d) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.*
Table 1 - Revenue Recognition Time Line and Criteria Before the Point of Sale EXPECTION: Revenue can be recognized prior to the point of sale it. Criterion 1: Realized Customer provides a valid promise of payment AND After the Point of Sales EXCEPTION: The recognition of revenue must be deffered it. Customer does not provide a valid promise at time of receipt of product or service OR Significant effort remains on contract.
NORMAL: Revenue is generally recognized at this point in time Criterion 1 is typically satisfied at this point.
*Realized* can be interpreted as having cash or other assets received at some future time.
Revenue Recognition
AICPA Statement of Position 97-2 gives companies more guidance through a checklist of four factors that amplify the two criteria: 1) Persuasive evidence of an arrangement exists. 2) Delivery has occurred. 3) The vendors fee is fixed or determinable. 4) Collectibility is probable.
Example
Sales of goods
Rendering of service: Appropriate Accounting for a Contingent Rental On January 1, the company signed a 1-year rental for a total of $120,000, with monthly payments of $10,000 due at the end of each month. In addition, the renter must pay contingent rent of 10% of all annual sales in excess of $3,000,000 each month. The contingent payment is paid in one payment on December 31.
Rendering of service: Appropriate Accounting for a Contingent Rental On January 31, sales for the renter had reached $700,000. On July 31, the renter had reached a sales level of $3,150,000. On December 31, the renter had reached a sales level of $5,000,000.