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Financial accounting - Assignment Example
Author : feestcleora
Finance & Accounting
Pages 5 (1255 words)
Name: Instructor: Task: Date: Introduction This assignment presents the following issues: when to recognize revenues as stated in the IAS 18; the application of the IAS 18 to the case of the IBI Ryan PLC; and a discussion of the meaning of creative accounting and earnings management, in relation to IBI Ryan’s case…
In the context of a company or a business unit, an income is what is mostly referred to as the earnings after interest, depreciation and tax (EADIT). The gain can be described as an increase in the amount of revenue and/or income by a specific amount, as compared to a previous figure (Gupta 213-250). According to IAS 18, revenue is supposed to be recognized exclusively under the following criteria: when a business unit has completed the transfer of ownership of goods; when a business has ceased exercising applicable managerial authorities and has given up any form of control over the goods; when the amount of the expected revenue can be determined with consistency; when it is certain that financial inflows resulting from a certain business transaction will be directed to an entity; and when expenditures and costs related to a business transaction can be measured with consistency (Christian and Lu?denbach 64-87). ...