RSM219H1 Lecture Notes - Lecture 4: Spotify, Weighted Arithmetic Mean, Income Statement
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RSM219H1 Full Course Notes
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Rsm219 - lecture 4 : revenue recognition and the statement of income. A/r, estimating revenue recognized (accrual) is more complex. Revenue separate from income, separates core activities with investment activities, etc. Compares efficiency of core activities over years. When the book is checked out at cashier. Revenue recognized when good is delivered to recipient. Earnings process is substantially complete (mostly complete) I. e. customer"s dog eats book = their responsibility. Vender has no continued involvement or control. Costs and revenues can be measured reliably. Some sales are made on credit/ installment. If doubt occurs, sale should not be recognized. Some people may not pay, but if most pay, then risk is marginal. Revenue should be measured at fair value of consideration received/receivable, some complexities may occur: Book amount received (if 20% discount, 80% booked on account) Book full amount, then estimate sale discount estimated that will be claimed. In either scenario, net impact is about the same.