Revenue recognition and users of financial statements

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• Discuss why no estimates or subjectivity is allowed in the preparation of financial statements.

  Users of financial statements want reliable and accurate information. The accounting profession has therefore developed certain principles and guidelines. They are collectively termed as conceptual frame work.

• revenue recognition

  ________________________________ More info: The SEC issued SAB 101 in December 1999 to provide guidance to auditors and public companies on recognizing, presenting and disclosing revenue in financial statements.

• WorldCom: The Expense Recognition Principle

  Revenue recognition is important for users of financial information because the revenue recognition principle informs the users of the actual earnings of the firm.

• Accepted Accounting Principles

  Revenue recognition principal states that the revenue is recognized when income is actually earned. The basic principal of revenue recognition is that income should be earned and its collectibility should be assured.

• SFAS - Revenue Recognition

  125646 Revenue Recognition Describe the process by which standards are set and how this may affect the Statements of Financial Accounting Standards. Regarding revenue recognition.

• Summarize the sources and objectives of modern income tax statutes. Compare and contrast GAAP and tax accounting. Explain why they are different.

  that companies use to compile their financial statements.

• Please choose 3 terms from the following list for this paper

  The SEC has forced many companies to restate their financial statements because of improper revenue and/or expense recognition. If the company recognizes income too early, it leads to an overstated net income.

• H&M Accounting and Exposures

  Revenue Recognition: In GAAP, revenue recognition requires use of vendor specific objective evidence of fair value in determining the selling price. IFRS does not have such requirement.

• Is an accrual-basis or cash-basis recognition of revenue more relevant for evaluating the performance of a sales staff?

  Is an accrual-basis or cash-basis recognition of revenue more relevant for evaluating the performance of a sales staff? Why? Answer: There are some timing issues also in the preparation of financial statements.