Revenue Recognition
Revenue is recognized when:
-Cash is received from the seller
-Seller has completed services
-It is likely that the buyer will be able to pay
What is the earnings approach?
The cost an asset was purchased for.
What is historical cost?
The main foundation for accounting.
What is the conceptual framework?
Revenue recognition approach used in IFRS
What is the contra-based approach
The value an asset is recorded at
What is the cost of the asset?
When some revenue is not recognized because it could be returned.
What is right of return?
How much we expect to get for an asset if its sold.
What is fair value?
Payment that is received without the goods or services being delivered
What is unearned revenue?
Cash that will be paid to meet liabilities or an amount that we expect to be able to collect
What is realizable value?