Revenue Recognition & Reporting Financial Performance. Stephenie Fox CA Principal, CICA. Revenue Recognition. CICA Handbook Section 3400 REVENUES Issued 1986 Revenue generating activities increasingly complex Current environment – sales figures used as indicator in evaluating stock prices.
Stephenie Fox CA
Addresses timing of revenue recognition
Revenue is the inflow of cash, receivables or other consideration arising in the course of the ordinary activities of an enterprise, normally from the sale of goods, the rendering of services and the use by others of enterprise yielding interest royalties or dividends. Revenue is net of items such as trade or volume discounts, returns and allowances, claims for damaged goods, and certain excise and sales taxes.
Performance achieved under 3400.07 when:
Recognize revenue in the period in which all of these criteria are met
final understanding between the parties as to the specific nature and terms of the agreed upon transaction