MGAC01H3 Lecture Notes - Papyrus 66, Seneca College, Washing Machine
3 Aug 2014
School
Department
Course
Professor
Document Summary
Learning goals: understand the basic concepts of revenue recognition, including. Rcmp : the earnings approach consider how it is different depending on type of business, be able to be proficient in applying specific revenue recognition methods. Learning goal 1: understand the basic concepts of revenue recognition, including rcmp . Deciding which period to recognize revenue requires judgement for particular situations, even though specific criteria for revenue recognition exists. A decision framework to be used to decide in a business situation if revenue and be recognized: Learning goal 2: earnings approach consider how it is different depending on type of business. Learning goal 3: be able to account for long-term contracts. Two methods of revenue recognition are used in accounting for contracts that are long-term in nature (greater than 1 year): percentage-of-completion method. Gross profit is recognized periodically, based on the percentage of the job that is complete, rather than when the entire job is completed: completed contract method.
