What is the current environment regarding revenue recognition? When is revenue usually recognized? What conditions should exist for the recognition at date of sale for all or part of the revenue and income from the sale transaction? When is revenue recognized for the following:
From Selling Products?
From Rendering Services?
From Permitted Other to Use Enterprise Assets?
From Disposing of Assets Other than Products?
Revenue recognition under GAAP was defined in FASB Statement of Financial Accounting concepts No. 5 many years ago. It stated that revenue is recognized when a transaction occurs and 1) the revenue is realized or realizable, AND 2) the revenue is earned.
Next the SEC issued guidance in SAB 101 stating that the two criteria above are met when ALL the following are established:
1. Persuasive evidence of an arrangement exists. ...
In a 201 word cited solution, the response explains the criteria for revenue recognition and then applies the concepts to the questions.