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Revenue recognition and users of financial statements

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Why is revenue recognition important to the users of financial statements. What type of decisions of the statement user may be affected by revenue recognition?

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Recognition of Revenue

The inclusion of revenue in the profit and loss account. Revenue may be recognised when a contract of sale is made or, alternatively, when the cash has actually been received. Revenue is typically the single largest item reported in a company's financial statements.

Trends and growth in the Revenue of a company's income statement are barometers investors use when assessing the company's past performance and future prospects.It is regarded as bad practice to recognise revenue before either it has been received in ...

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This discusses the revenue recognition and users of financial statements

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