StudentShare solutions
Triangle menu

Revenue Recognition Policy: Metropolitan - Case Study Example

Nobody downloaded yet
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 going to be disposed off, there are also cost of materials purchased to assist the job being done, labor cost is also reflected in the revenue income, allowances expenses of the employees like travelling expenses and lastly there are tax expenses which has to be paid in time. In order to analyses each and every scenario is in order to know at what point does the ownership of the waste material passes from the customer to Metropolitan and when is the contract is valid. In the first scenario, when the customer is transporting the materials to the disposal site, then the contract has not been performed substantially and the Metropolitan should not record any revenue since the contract is not fully done, the revenue should be recorded on 20th after the successful destruction of that waste. According to the accounting standards a service can be rendered as a single act or as continuous process over a period of time, charges of the same services can also be spread over the period through which the work is done. Where the contract is made the revenue is recognized when there is a substantial work performance which in our case has not been done they should record it using periodicity concept where revenue of any particular time is recorded at that time when they are realized. In the second scenario the contract is done in part and the Metropolitan is free to record the revenue as per the completion method of revenue recognition where one realized revenue over period of time. The part of collection and transportation has been done so the company can realized that part but should not recognize the whole revenue since the contract of destruction part has not been done and the whole revenue will be realized after the whole project is done. ASC 605-15-25-1: Being realized or realizable…states that revenue and gains are realized when products (goods or services), merchandise, or other assets are exchanged for cash or claims to cash.... Being earned…states that revenue is not recognized until earned.  That paragraph states that an entity's revenue-earning activities involve delivering or producing goods, rendering services, or other activities that constitute its ongoing major or central operations, and revenues are considered to have been earned when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues… ASC 605-20-25-4, costs that are directly related to the acquisition of a contract and that would have not been incurred but for the acquisition of that contract (incremental direct acquisition costs) shall be deferred and charged to expense in proportion to the revenue recognized. All other costs, such as costs of services performed under the contract, general and administrative expenses, advertising expenses, and costs associated with the negotiation of a contract that is not consummated, shall be charged to expense as incurred. .605-20-S25-1 See paragraph 605-20-S99-2, SEC Observer Comment: Revenue and Expense Recognition for Freight and Services in Process, for SEC Staff views on recognition of revenue and expenses by freight service entities In my examination of the company product and in accordance with the international accounting standards, revenues should be recognized in the financial ...Show more
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Revenue Recognition Policy: Metropolitan Case Study”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/63346-a-case-study-in-revenue-recognition-policy
(Revenue Recognition Policy: Metropolitan Case Study)
https://studentshare.net/finance-accounting/63346-a-case-study-in-revenue-recognition-policy.
“Revenue Recognition Policy: Metropolitan Case Study”, n.d. https://studentshare.net/finance-accounting/63346-a-case-study-in-revenue-recognition-policy.
  • Cited: 0 times

Summary

The main aim of this memo is to show the result of the expenses and revenue recognition for Metropolitan environment service. …
Revenue Recognition Policy: Metropolitan
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the case study on your topic
"Revenue Recognition Policy: Metropolitan"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Inherent Difference Between US GAAP and IFRS on Revenue Recognition
The timing and measurement of revenue, and the associated expenses, are subject to detailed guidance in the GAAP and general guidance in the IFRS, which specifies the conditions for recognizing revenue before, at, and after the time of sale. The seller necessity is to have earned revenues in the sense that it has performed, or substantially performed, its obligation to the buyer, and it can constantly estimate the cash or cash equivalent value of assets received from the customer.
5 pages (1250 words) Case Study
Employment Law--Case Report [British Nursing Association v Inland Revenue]
Scope of employment defines the working areas of employee and employer. "Employment law is the body of laws, administrative rulings, and precedents which addresses the legal rights of, and restrictions on, workers and their organizations. As such, it mediates many aspects of the relationship between trade unions, employers and employees.
10 pages (2500 words) Case Study
Revenue Recognition Case
This is because the membership fee is received at the beginning of the membership and the member is allowed to get the services until the membership expires, which can be because of default of payment, deliberate membership cancellation or any other reason
1 pages (250 words) Case Study
SWALLOWS AND AMAZONS, OR THE SPORTING EXCEPTION TO THE GENDER RECOGNITION ACT
the major objective of the International Olympic Committee’s sex verification was to prohibit male contestants from participating in female events. In that regard, the Gender Recognition Act 2004 therefore maintained that transgendered individuals be denied the opportunity to
7 pages (1750 words) Case Study
A Case Study in Revenue Recognition Policy
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
5 pages (1250 words) Case Study
Revenue Budget(s)s
This would be beneficial to the organization. a) If the new system is implemented at the beginning of the year, there would be higher deficits in general for that financial year. This is because the cost incurred by the organization in contracting outsiders
1 pages (250 words) Case Study
Advertisement that attempts to trigger problem recognition
Apart from these categories of advertisements, there are these advertisements that try to let us know first where the problem is so that they can provide for us the solutions to the problem. In a way, these ads tell us vividly why we need to buy some products through
2 pages (500 words) Case Study
Revenue Recognition: D&T Case 99-7 "Class Act"
The standard identifies the situation under which the criterion would be met, and consequently revenue being recognized. According to the Class Act, revenue is often
2 pages (500 words) Case Study
Policy Brief
However, contrary opinions have been generated to the success and implementation of the law relying on different accounts from the media, government releases, private sector surveys and
6 pages (1500 words) Case Study
Revenue Process Case Study
In this case, issues regarding confidentialty would increase the inherent risk. The method used to place orders has the potential to increase the inherent risk. The customers place their orders online or through the phone. Such a process would
1 pages (250 words) Case Study
Comments (0)
Click to create a comment
Let us find you another Case Study on topic Revenue Recognition Policy: Metropolitan for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us