revenue Essay example
Undergraduate
Essay
Finance & Accounting
Pages 5 (1255 words)
Download 0
Ibi Ryan Plc: Revenue Recognition and Earnings Management Revenue Recognition under IAS 18 The emphasis in auditing is not restricted to arithmetical accuracy. Appropriate application of accounting principles and disclosures is necessary for forming a correct view of the state of affairs…

Introduction

Income encompasses both revenue and gains.” (ec.europa.eu, p. 2) Revenue: “IAS 18 defines revenue as ‘the gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants” (ACCA, 2013.) Gain: “An increase in the value of an asset or property. A gain arises if the selling or disposition price of the asset is higher than the original purchase or acquisition price” (Investopedia, n.d.) Normally the word ‘profit’ is used in business context in the place of gain. It is also very important that that revenue and the related expenses should be matched with the accounting period, and this is called matching principle. “When the selling price of a product includes an identifiable amount for subsequent servicing that amount is deferred and recognised as revenue over the period during which the service is performed. The amount deferred is that which will cover the expected costs of the services, together with a reasonable profit on those services” (ACCA 2013). ...
Download paper
Not exactly what you need?

Related papers

Empirical Investigation of Revenue Management Applicability
American Airlines stated that revenue management aims to “maximize passenger revenue by selling the right seats to the right customers at the right time” (qtd. in Yu 69). However, not only did the RM concept spread like wildfire in the airline industry, it also garnered adequate reputation in other industries. Revenue management as it is applied can entirely aid in pricing decisions and…
Inherent Difference Between US GAAP and IFRS on Revenue Recognition
In case either requirement fails, the seller must defer revenue recognition, and accounting guidance provides special procedures for single arrangements that contains multiple deliverables and for long-term contracts (Gill, 2007). US GAAP on Revenue Recognition A firm’s gross accounts receivable reflects the amounts customers have promised to pay, and balance sheet displays these receivables net…
Revenue Recognition Policy: Metropolitan
In this manner there is no physical product leaving the premise in order for revenue to be earned. Throughout the examination some of the major areas of revenue income recorded by the Metropolitan in their books of accounts include the following; Disposal non-hazardous and hazardous waste materials, the cost of transporting of the waste materials from the customer premises to where the waste are…
Internal Revenue Code/Taxable Income
For example a company may decide to purchase asset or reduce obligations out of its retained earnings. In most cases retained income does reflect the dividend policy of the company because the board will decide either to reinvest such profit or to pay them out to stockholders. The retained earning I taxable at corporate tax rate as well as pay as you earn (PAYE) on the shareholder share of profit…
Revenue recognition : goods and services
The study will comprise the major points of differences in relation to revenue recognition that will be identified under both the accounting practices (i.e. GAAP and IFRS). Analyzing these aspects, the study will ascertain the grounds on which the accounting treatment of the identified issue, i.e. revenue recognition will be different if US GAAP is replaced with the principles of IFRS.…
International Accounting Standards: Revenue Recognition in construction Industry
Bradley Richards is a leading firm of accountants with many clients in the construction industry. The accounting practices adopted by these companies need to be reoriented in the light of these developments. This paper seeks to discuss about the important aspects with regard to revenue recognition in accounting of the construction contracts for updating our clients with the developments in this…
Financial Statement fraud and Revenue recognition fraud
We can define financial fraud as an intentional act to deceive people through manipulated financial statements for personal gain (“Bank Negara Malaysia” 1). Financial fraud is crime under civil law and involves complex financial transactions conducted by white-collar business professionals with a criminal intention (“Bank Negara Malaysia” 1). Nevertheless, financial fraud derives numerous…