A record number of companies are revising their financials in 2007. The most frequent cause of financial restatements was revenue recognition, which accounted for over 20 percent of all restatements in 2007 and 20 percent during the past five years. This course covers the accounting, reporting, and disclosures associated with revenue recognition for the sale of products or rendering of services. Revenue involves a gross increase in assets or decrease in liabilities. Revenue may be recognized at the time of sale or service, during production, at the completion of production, and at the time of cash receipt. Long-term construction contracts may be accounted for under the percentage-of-completion method or the completed contract method. When a right of return exists, revenue may or may not be recognized, depending on the circumstances. The accounting treatment of warranty and maintenance contracts, contributions, and computer software is also discussed.
Delivery Method: Online Interactive Self-Study
Advanced Preparation: None
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Category: Accounting and Auditing
Field of Study:
Passing Score: 70%
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1. Identify some of the reasons for financial restatements.
2. Identify and apply the revenue recognition principles.
3. Recognize the principles for the collection method for revenue recognition.
4. Recognize how to apply the completed performance method for long-term contracts.
5. Identify when to apply the installment-sales and cost-recovery methods of accounting.
6. Apply AICPA SOP:97-2 to software revenue recognition.
7. Outline some differences between U.S. GAAP and IFRS.
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