Chapter 30

Revenue Recognition

1 The Nature of Revenue

2 The Timing of Revenue Recognition

2.1 The critical event approach

2.1.1 The recognition of revenue at the completion of production

2.1.2 The recognition of revenue at the time of sale

2.1.3 The recognition of revenue subsequent to delivery

2.2 The accretion approach

3 The Requirements of IAS 18

3.1 Scope

3.2 The distinction between income, revenue and gains

3.3 Revenue and agency relationships

3.4 Income and distributable profits

3.5 Measurement of revenue

3.6 Identification of the transaction

3.7 The sale of goods

3.8 The rendering of services

3.9 Exchanges of goods and services

3.10 Exchanges of property plant and equipment

3.11 Barter transactions involving advertising services

3.12 Interest, royalties and dividends

3.13 Uncollectible revenue

3.14 Disclosure

3.15 Revenue in the statement of comprehensive income

3.15.1 Interest and other finance income

3.15.2 Gains on disposal of property, plant and equipment

4 Revenue Recognition Under US GAAP

4.1 Applicability of US literature

4.2 The general approach to revenue recognition under US GAAP

4.3 US GAAP requirements for multiple-element transactions

5 The IASB/FASB Joint Revenue Recognition Project

5.1 Project Background

5.2 Summary of the proposed model

5.3 Changes to current practice that would result from the proposed model

6 Practical Issues

6.1 Sale of goods

6.1.1 ‘Bill and hold’ sales

6.1.2 Goods shipped subject to conditions

6.1.3 Layaway sales

6.1.4 Payments in advance ...

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