MGT220H5 Lecture Notes - Lecture 5: Current Liability, Netaji Subhas Institute Of Technology, Measurement Uncertainty
Document Summary
Inflow of economic benefits (e. g. cash, receivables, etc) There are two main conceptual views on how to account for revenues/sales: Effective for years beginning on or after january 1, 2017. The performance of the service is the determination of revenue recognition: service may be on-going or continuous. Recognize revenue at each critical event, as long as it is collectible (e. g. , audit work) Allows recognition of recoverable revenues equal to costs incurred if outcome is not reliably measurable. Use [ input ] measures (e. g. costs incurred or labour hours worked) Use [ output ] measures (e. g. storeys of a building completed, kilometres of road built) Construction in process (debit): the costs incurred + gross profit recognized to date. Billings on construction in process (contra account, credit): amount billed to customers to date. The difference of the two accounts is recorded on the balance sheet as either: Current asset* if difference is a debit balance or.
