中级财务会计英文ch_001.ppt

中级财务会计英文ch_001.ppt

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,RevenueRecognition,Chapter12,IntermediateAccounting12thEditionKieso,Weygandt,andWarfield,PreparedbyCobyHarmon,UniversityofCalifornia,SantaBarbara,Applytherevenuerecognitionprinciple.Describeaccountingissuesforrevenuerecognitionatpointofsale.Applythepercentage-of-completionmethodforlong-termcontracts.Applythecompleted-contractmethodforlong-termcontracts.Identifytheproperaccountingforlossesonlong-termcontracts.Describetheinstallment-salesmethodofaccounting.Explainthecost-recoverymethodofaccounting.,LearningObjectives,RevenuesInflowsofassetsorsettlementsofliabilitiesduringaperiodfromdeliveringorproducinggoodsorservices.ExpensesOutflowsofassetsorincurrenceofliabilitiesduringaperiodfromdeliveringorproducinggoodsorservices.,Concepts,Recognitionistheprocessofformallyrecordingandreportingitemsinthefinancialstatements.,RevenueRecognition,DefinitionIstheitemanasset,liability,equity,revenue,expense,gain,orloss?

MeasurabilityDoesitpossesstheattributesthatpermitreliablemeasurement?

RelevanceWillitmakeadifferencetothedecisionmaker?

ReliabilityIsitafaithfulrepresentation?

RevenueRecognition,Revenueshouldberecognizedinthefinancialstatementwhen.Itisearned,andItisrealizedorrealizable.,RevenueRecognition,Revenueisearnedwhentheearningsprocessiscompletedorvirtuallycompleted.Revenueisrealizedwhencashisreceived.Revenueisrealizablewhenclaimstocasharereceivedthatcanbeconvertedintoaknownamountofcash.,RevenueRecognition,Theeconomicsubstanceoftheeventtakesprecedenceoverthelegalformofthetransaction.Therisksandbenefitsofownershiphavebeentransferredtothebuyer.Thecollectibilityofthereceivablefromthesaleisreasonablyassured.,Thedecisionastowhentorecognizerevenuefocusesonthreefactors:

RevenueRecognition,RevenuerecognizedAtdelivery（pointofsale）AfterdeliveryBeforedeliveryofproductorservice,RevenueRecognition,Revenueisearnedandrealizedatthepointofsale.Theproductorservicehasbeendeliveredtothecustomerandcashhasbeenreceivedorisreceivable.Thismethodissometimescalledthe“salesmethod”or“deliverymethod.”,RevenueRecognitionPointofSale,Accountingforlong-termconstructioncontractsCompleted-ContractMethodPercentage-of-CompletionMethod,RevenueRecognitionBeforeDelivery,Percentage-of-completionmethodisappropriatewhen.-Contractspecifiestheamountofconsiderationtobeexchangedandthetermsofsettlement.-Buyerisexpectedtosatisfytheobligation.-Contractorcanperformaccordingtothetermsofthecontract.,RevenueRecognitionBeforeDelivery,InputMeasuresEffortdevotedtoprojectcomparedtototaleffortexpected（costincurredtodatecomparedtototalestimatedcosts）OutputMeasuresResultstodatecomparedtototalresults,MeasuringProgressTowardCompletion,Cost-to-CostMethod,TotalcostsincurredtodatePercentcomplete=Mostrecentestimateoftotalcostsoftheproject,MeasuringProgressTowardCompletion,Cost-to-CostMethodCurrentPeriodRevenueTotalRevenuefromContractPercentCompleteTotalRevenuetoRecognize-RevenueRecognizedinPriorPeriodsRevenueRecognizedinCurrentPeriod,MeasuringProgressTowardCompletion,A）Preparethejournalentriesfor2007,2008,and2009.,CasperConstructionCo.,Percentage-of-CompletionMethod,Illustration:

Percentage-of-CompletionMethod,Illustration:

Percentage-of-CompletionMethod,Illustration:

Percentage-of-CompletionMethod,Illustration:

Companiesrecognizerevenueandgrossprofitonlyatpointofsalethatis,whenthecontractiscompleted.Underthismethod,companiesaccumulatecostsoflong-termcontractsinprocess,buttheymakenointerimchargesorcreditstoincomestatementaccountsforrevenues,costs,orgrossprofit.,CompletedContractMethod,CompletedContractMethod,Illustration:

Illustration:

CompletedContractMethod,Long-TermContractLosses,TwoMethods:

LossintheCurrentPeriodonaProfitableContractPercentage-of-completionmethodonly,theestimatedcostincreaserequiresacurrent-periodadjustmentofgrossprofitrecognizedinpriorperiods.LossonanUnprofitableContractUnderbothpercentage-of-completionandcompleted-contractmethods,thecompanymustrecognizeinthecurrentperiodtheentireexpectedcontractloss.,Illustration:

LossonProfitableContract,Long-TermContractLosses,b）Preparethejournalentriesfor2007,2008,and2009assumingtheestimatedcosttocompleteattheendof2008was$215,436insteadof$170,100.,CasperConstructionCo.,Long-TermContractLosses,Illustration:

LossonProfitableContract,Long-TermContractLosses,Illustration:

LossonProfitableContract,Illustration:

LossonUnprofitableContract,Long-TermContractLosses,c）Preparethejournalentriesfor2007,2008,and2009assumingtheestimatedcosttocompleteattheendof2008was$246,038insteadof$170,100.,CasperConst