2. Scope
(a) the sale of goods;
(b) the rendering of services;
(c) the use by others of entity assets
yielding interest, royalties and
dividends.
3. Definition
-gross inflow of economic
benefits during the period arising
in the course of the ordinary
activities of an entity when those
inflows result in increases in
equity measured at the fair value
of the consideration received or
receivable.
4. Sale of Goods Criteria
(a) Transfer of significant risks and rewards of
ownership of the goods to the buyer;
(b) No continuing managerial involvement
associated with ownership;
(c) The amount of revenue can be measured
reliably;
(d) It is probable that the economic benefits
associated with the transaction will flow to the
entity;
(e) The costs incurred can be measured reliably.
5. When to recognize revenue?
1.At the point of sale;
2.At the completion of production;
3.After the sale;
4.During production(before sale)
6. Rendering of Services
(a) the amount of revenue can be measured
reliably;
(b) it is probable that the economic benefits
associated with the transaction will flow to
the entity;
(c) the stage of completion of the transaction can
be measured reliably;
(d)the costs incurred can be measured reliably.
7. Use of Assets by others yielding
interest royalties and dividend
(a) Probability that economic benefits will
follow to the entity;
(b) The amount can be measured reliably.