Time value of money
This represents the value that some dollar amount, measured today, will grow to at some point in the future.
What is future value?
When transaction value depends on the outcome of some future event, the transaction value is said to have _____.
What is variable consideration?
These are the two types of discounts that companies typically offer to customers.
What are (1) trade discounts and (2) sales (or cash) discounts?
This represents the value of some future cash flow in today's dollars.
What is present value?
What are stand-alone selling prices?
These are the two methods that can be used to account for sales discounts.
What are the (1) gross and (2) net methods?
These represent a series of equal, periodic payments.
What is annuity?
When stand-alone selling prices are known, revenue can be allocated to performance obligations by doing this.
What is:
1.) Totaling all stand-alone selling prices for the performance obligations in the contract,
2.) Calculating the % of the total for each, and
3.) Applying those %s to the contract value?
Companies sometimes raise cash by using their accounts receivable. These are the two ways in which accounts receivable can be used to raise cash.
What are secured borrowing and the sale of receivables?
What is an annuity due?
When there is piece of contract's transaction value that depends on the outcome of future events, the transaction value can be estimated by using the probabilities associated with each potential outcome. This methodology is known as _______.
What is calculating expected value?
For estimates of future returns, the company records this.
What is a refund liability?
What is an ordinary annuity?
This is how you calculate current period revenue for a long-term contract.
Revenue recognized for this period =
{Current, total estimated revenue for entire contract × % of project completed to date} –
{Total revenue recognized in prior periods}
Sales returns are recorded with this item in the income statement.
What is with revenue?