MGCR 211 Lecture Notes - Lecture 9: Accrual, Revenue Recognition, Earnings Management
Document Summary
Revenues are inflows of assets and/or settlement of liabilities from delivering or producing goods, rendering services, or other activities that constitute the entity"s ongoing major or central operations. Inflows of assets or settlement of liabilities. Result of some productivity activity of the firm. The process of formally recording or incorporating an item into the financial statements of an entity as an asset, liability, revenue, expense, or the like. Included in financial statements and statement totals. Disclosure by other means is not recognition. To recognize a revenue it must be: realized (or realizable, earned. Ifrs has developed revenue recognition criteria to assist in the resolving the conflict. 2 basic criteria: performance (earned, measurement (realized) Either rely on a critical event or recognize it gradually over time. Defer recognition to a later date if there exists any uncertainty over any of these: performance (earned) The company has completed a substantial portion of the production and sales effort.
