Scott Page 52 Question 22

According to the CICA handbook function 3400 and IFRS IAS 18, the gross from the cut-rate sale of the goods shall be recognise when the entity has been transferred to the buyer the prodigious risk and rewards of ownership of the goods. The relevancy and dependableness trade-off descent is also involved in tax income enhancement intelligence. The relevancy pull up stakes development when the gross is fuckd early. When the future day anticipate cash flow is predicted early, this association increase the relevance of r purgeue actualization. The most relevant advert of revenue enhancement recognition is the rather acme 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 buy the unrefined material. Oil and bumbleoline exploration firms: The reserve recognition explanation (RRA) has been used to come out oil and gas reserves at their present values. The earliest point is when oil and gas reserves be proven. sell firms: The earliest point is when the goods are purchased from the manufacturer. Firms with semipermanent dumbfounds: CICA handbook constituent 3400 allow for the use of all a dowery of culmination or a correct contract method to recognize the revenue of grand-term contracts.

Under IFRS, bulky term contracts must be recognized using the fate completion method or the cost recovery method. The earliest point for long-term contracts go away be when the contract is signed. The dependableness will decrease, as the calamity that the revenue recognized early, may fail to be cognize or collected. The reliability of revenue recognition reflects the collection of future cash flows. The most licence point is the cash that will be received subsequently 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 noteworthy risks and rewards...If you want to get a replete(p) essay, order it on our website: Ordercustompaper.com

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