Scott Page 52 Question 22

According to the CICA handbook section 3400 and IFRS IAS 18, the gross from the sales event 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 tax enhancement comprehension. The relevance will development when the revenue is recognized early. When the future expected cash flow is predicted early, this association increase the relevance of revenue cognizance. The most relevant consign of revenue recognition is the earlier detail 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 bargain for the unrefined material. Oil and throttle valve 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 and 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 each a dowery of completion or a entire contract method to recognize the revenue of grand-term contracts.

Under IFRS, extensive term contracts must be recognized using the percent completion method or the cost recovery method. The earliest point for long-term contracts will be when the contract is signed. The reliableness will decrease, as the possibility that the reven ue recognized early, may fail to be realized! or collected. The reliability of revenue recognition reflects the collection of future cash flows. The most certify point is the cash that will be received by and by 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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