intermediate accounting Revenue RecognitionPPT课件

RevenueRecognitionIntermediateAccounting,17EStice|Stice|Skousen©2010CengageLearningPowerPointpresentedby:DouglasCloudProfessorEmeritusofAccounting,PepperdineUniversity8-*RevenueRecognitionRecognitionreferstothetimewhentransactionsarerecordedonthebooks.TheFASB’stwocriteriaforrecognizingrevenuesandgainswerearticulatedinFASBConceptsStatementNo.5.8-*Revenuesandgainsaregenerallyrecognizedwhen: Theyarerealizedorrealizable. Theyhavebeenearnedthroughsubstantialcompletionoftheactivitiesinvolvedintheearningsprocess.RevenueRecognition8-*RevenueRecognitionRevenueisnotrecognizedpriortothepointofsalebecauseeither:Avalidpromiseofpaymenthasnotbeenreceivedfromthecustomer,orThecompanyhasnotprovidedtheproductorservice.Exceptionstotheserules: Thecustomerprovidesavalidpromiseofpayment. Conditionsexistthatcontractuallyguaranteethesale.8-*AICPAStatementofPosition97-2givescompaniesmoreguidancethroughachecklistoffourfactorsthatamplifythetwocriteria: Persuasiveevidenceofanarrangementexists. Deliveryhasoccurred. Thevendor’sfeeisfixedordeterminable. Collectibilityisprobable.RevenueRecognition8-*8-*8-*Receiptof$1,000cashasinitialsign-upfee:Cash 1,000 UnearnedInitialSign-UpFees 1,000Receiptoffirstmonthlypaymentof$50:Cash 50 MonthlyServiceRevenue 50Partialrecognitionoftheinitialsignupfeeasrevenue($1,000/100months):UnearnedInitialSign-UpFees 10 InitialSign-UpFeeRevenue 10AppropriateAccountingforaServiceProvidedOveranExtendedPeriod8-*EITF00-21Adeliveredelementofamultiple-elementarrangementisconsideredtobeaunitofaccountingifthatdeliveredelementhasstandalonevalueandifthefairvalueofanyundeliveredelementcanbeobjectivelyandreliablydetermined.8-*AppropriateAccountingforaRefundableMembershipSellerCompanyreceives$1,200cashfromeachcustomerasafullyrefundable,one-yearmembershipfee.ItisestimatedthatthecosttoSellerCompanytoprovidethemembershipservicetoeachcustomerwillbe$360foroneyear.SellerCompanycanreliablyestimatethat40%ofthecustomerswillrequestrefundsduringtheyear.Assumeallrefundsoccurattheendoftheyear.Therewere1,000customers.(continues)8-*AppropriateAccountingforaRefundableMembership8-*OnJanuary1,OwnerCompanysigneda1-yearrentalforatotalof$120,000,withmonthlypaymentsof$10,000dueattheendofeachmonth.Inaddition,therentermustpaycontingentrentof10%ofallannualsalesinexcessof$3,000,000.ThecontingentpaymentispaidinonepaymentonDecember31.(continues)AppropriateAccountingforaContingentRental8-*OnJanuary31,salesfortherenterhadreached$700,000.OnJuly31,therenterhadreachedasaleslevelof$3,150,000.OnDecember31,therenterhadreachedasaleslevelof$5,000,000,ofwhich$1,000,000occurredinDecember.(continues)AppropriateAccountingforaContingentRental8-*AppropriateAccountingforaContingentRental8-*Asset-and-LiabilityApproachtoRevenueRecognitionExampleWilksCompanysellsaplasmaTVscreenand2-yearwarrantytoacustomerforajointpriceof$2,000.Allcashiscollectedupfront.Otherrelevantdata: CostofplasmaTVscreen,$1,500 SalespriceofTVifsoldseparately,$1,785 Salespriceof2-yearwarrantyifsoldseparately,$315 AmountpayabletoaTVwholesalertoacceptresponsibilitytoprovideTV,$1,650 Amountpayabletoservicecompanytoacceptresponsibilityofprovidingwarranty,$240(continues)8-*JournalentriesondeliveryofTV:ContractLiability—TVScreen 1,700 SalesRevenue 1,700CostofGoodsSold 1,500 Inventory 1,500Journalentryatpointofcashreceipt:Cash 2,000 ContractLiability—TVScreen 1,700¹ ContractLiability—Warranty 300²¹$2,000[$1,785/($1,785+$315)]²$2,000[$315/($1,785+$315)]Asset-and-LiabilityApproachtoRevenueRecognitionExample8-*Thefairvaluesoftheperformanceobligationliabilitiescreateacontractsigning.RecallthataTVwholesalerwouldcharge$1,650foracceptingtheresponsibilityofprovidingtheplasmaTVtothecustomer.Likewise,aservicecompanywouldcharge$240forprovidingthetwoyearsofwarranty.(continues)MeasurementModel8-*Theentrytorecordthecashassetandthetwoperformanceobligationscreatedatthecontractsigningisasfollows:Cash 2,000 ContractLiability—TVScreen 1,650 ContractLiability—Warranty 240 Revenue 110MeasurementModel8-*RevenueRecognitionPriortoProvidingGoodsorServices Completed-contractmethodrecognizesallincomewhenprojectiscompleted. Percentage-of-completionmethodrecognizesrevenuethroughoutthetermofthecontract. Proportionalperformancemethodreflectsrevenueearnedonservicecontractsunderwhichmanyactsofservicearetobeperformedbeforethecontractiscomplete.8-*Percentage-of-CompletionMethodRequirements Dependableestimatesof: contractrevenues contractcosts progresstowardcompletion Contractclearlyspecifies: enforceablerightsoftheparties considerationtobeexchanged mannerandtermsofsettlement(continues)8-* Thebuyercanbeexpectedtosatisfyobligationsunderthecontract. Contractorcanbeexpectedtoperformthecontractualobligation.Percentage-of-CompletionMethodRequirements8-*Percentage-of-CompletionInputMeasures Cost-to-costmethodisperhapsthemostpopularoftheinputmeasures.Thedegreeofcompletionisdeterminedbycomparingcostsalreadyincurredwiththemostrecentestimatesoftotalexpectedcoststocompletetheproject.Engineersareoftencalledintohelpprovideestimates.8-*InJanuary2010,StrongConstructionCompanywasawardedacontractwithatotalpriceof$3,000,000.Strongexpectstoearn$400,000profitonthecontract.Theconstructionwascompletedovera3-yearperiod.ThetableshownnextprovidestheactualcostthatStrongexperiencedandthecompletionrate.MeasuringthePercentageofCompletion8-*MeasuringthePercentageofCompletion8-*AccountingforLong-TermConstructionContractsContinuingwiththeStrongConstructionCompanyillustration,thedirectandindirectcosts,billings,andcollectionsareasfollows:8-*Completed-ContractMethodConstructioninProgress 1,040,000 Materials,Cash,etc. 1,040,000Torecordcostsincurred.AccountsReceivable 1,000,000 ProgressBillingson ConstructionContracts 1,000,000Torecordbillings.Cash 800,000 AccountsReceivable 800,000Torecordcashcollections.2010(continues)8-*ConstructioninProgress 910,000 Materials,Cash,etc. 910,000Torecordcostsincurred.AccountsReceivable 900,000 ProgressBillingson ConstructionContracts 900,000Torecordbillings.Cash 850,000 AccountsReceivable 850,000Torecordcashcollections.2011Completed-ContractMethod(continues)8-*ConstructioninProgress 650,000 Materials,Cash,etc. 650,000Torecordcostsincurred.AccountsReceivable 1,100,000 ProgressBillingson ConstructionContracts 1,100,000Torecordbillings.Cash 1,350,000 AccountsReceivable 1,350,000Torecordcashcollections.2012Completed-ContractMethod8-*Percentage-of-CompletionMethod Theentrieswerecordedusingthecompleted-contractmethodarealsothesameentriesthatwouldbeusedforthepercentage-of-completionmethod. Thecompleted-contractmethodis“wrappedup”usingtheentriesshowninSlides30and31.Thepercentage-of-completionmethodrequirestheentriespresentedinSlides32to34.8-*2012Underthecompleted-contractmethod,thefollowingentrieswouldbemadetorecognizerevenueandcostsandtocloseouttheinventoryandbillingaccounts.ProgressBillingsonConstructionContracts 3,000,000 RevenuefromLong-Term ConstructionContracts 3,000,000(continues)Completed-ContractMethod8-*2012Underthecompleted-contractmethod,thefollowingentrieswouldbemadetorecognizerevenueandcostsandtocloseouttheinventoryandbillingaccounts.CostofLong-TermConstructionContracts 2,600,000 ConstructioninProcess 2,600,000Completed-ContractMethod8-*Percentage-of-CompletionCostofLong-TermConstructionContracts 1,040,000ConstructioninProgress 160,000 RevenuefromLong-Term ConstructionContracts 1,200,0002010(continues)Underthepercentage-of-completionmethod,thefollowingadditionalentrieswouldbemadetorecognizerevenue.8-*CostofLong-TermConstructionContracts 910,000ConstructioninProgress 140,000 RevenuefromLong-Term ConstructionContracts 1,050,0002011Percentage-of-Completion(continues)8-*CostofLong-TermConstructionContracts 650,000ConstructioninProgress 100,000 RevenuefromLong-Term ConstructionContracts 750,0002012Percentage-of-Completion8-*RevisionofEstimateInsteadofthepreviousillustration,assumethatattheendof2011,itwasestimatedthattheremainingcosttocompleteconstructionwas$720,000ratherthan$650,000.Thiswouldincreasethetotalestimatedcostto$2,670,000,reducetheexpectedprofitto$330,000,andchangethepercentageofcompletionfor2011.(continues)8-*RevisionofEstimate(continues)8-*Theentriesfor2010wouldbethesameasthoseshowninthepreviousexample.CostofLong-TermConstructionContracts 910,000ConstructioninProgress 80,000 RevenuefromLong-Term ConstructionContracts 990,000Allentriesfor2011wouldbethesameexceptfortheentrytorecordrevenueandcost.RevisionofEstimate(continues)8-*CostofLong-TermConstructionContracts 700,000ConstructioninProgress 110,000 RevenuefromLong-Term ConstructionContracts 810,0002012RevisionofEstimate8-*AssumethesamefactsforStrongConstructionCompany,excepttheestimatedcosttocompletethecontractattheendof2011was$1,300,000.Because$1,950,000ofcostshadalreadybeenincurred,thetotalestimatedcostwouldbe$3,250,000.ReportingAnticipatedContractLosses(continues)8-*ReportingAnticipatedContractLosses8-*AnticipatedContractLoss:Percentage-of-Completion(continues)8-*AnticipatedContractLoss:Percentage-of-CompletionTheentrytorecordtherevenue,costs,andadjustmentstoConstructioninProcessforthelossin2011wouldbeasfollows:CostofLong-TermConstructionContracts 1,010,000 RevenuefromLong-Term ConstructionContracts 600,000 ConstructioninProcess 410,000(continues)8-*AnticipatedContractLoss:Percentage-of-Completion8-*ProportionalRevenueRecognition InitialdirectcostsrelatedtoobtainingandperforminginitialservicesonthecontractMostservicecontractsinvolvethreedifferenttypesofcosts: Directcostsrelatedtoperformingthevariousserviceacts Indirectcostsrelatedtomaintainingtheorganizationtoservicethecontract8-*Acorrespondenceschoolentersinto100contractswithstudentsforanextendedwritingcourse.Thefeeforeachcontractis$500,payableinadvance.Theinitialdirectcostsrelatedtothecontractstotal$5,000.Actualdirectcostsforlessonsforthefirstperiodare$12,000.Thesalesvalueofthelessonscompletedis$24,000(ifsoldseparately,$60,000).AccountingforLong-TermServiceContracts(continues)8-*Expenseaccount(continues)AssetaccountLiabilityaccountAccountingforLong-TermServiceContracts8-*AccountingforLong-TermServiceContracts8-*RevenueRecognitionAfterDeliveryofGoods8-*InstallmentSalesMethod Undertheinstallmentsalesmethod,profitisrecognizedascashiscollectedratherthanatthetimeofsale. Itisusedmostcommonlyincasesofrealestatesaleswherecontractsmayinvolvelittleornodownpayment,paymentsarespreadover10to40years,andahighprobabilityofdefaultintheearlyyearsexists.8-*InstallmentSalesMethodRidingCorporationsellsmerchandiseontheinstallmentbasis,andtheuncertaintiesofcashcollectionmaketheuseoftheinstallmentmethodnecessary.Thefollowingdatarelatetothreeyearsofoperations.(continues)8-*InstallmentAccountsReceivable—2010 150,000 InstallmentSales 150,000CostofInstallmentSales 100,000 Inventory 100,000Cash 30,000 InstallmentAccounts Receivable—2010 30,0002010—DuringtheYear(continues)InstallmentSalesMethod8-*InstallmentSales 150,000 CostofInstallmentSales 100,000 DeferredGrossProfit—2010 50,000DeferredGrossProfit—2010 10,000 RealizedGrossProfiton InstallmentSales 10,000 $30,00033.33%2010—EndofYearInstallmentSalesMethod(continues)8-*InstallmentA/R—2011 200,000 InstallmentSales 200,000CostofInstallmentSales 140,000 Inventory 140,000Cash 145,000 InstallmentA/R—2010 75,000 InstallmentA/R—2011 70,0002011—DuringtheYearInstallmentSalesMethod(continues)8-*InstallmentSales 200,000 CostofInstallmentSales 140,000 DeferredGrossProfit—2011 60,000DeferredGrossProfit—2010 25,000DeferredGrossProfit—2011 21,000 RealizedGrossProfiton InstallmentSales 46,000 $75,00033.33%$70,00030%2011—EndofYearInstallmentSalesMethod(continues)8-*InstallmentA/R—2012 300,000 InstallmentSales 300,000CostofInstallmentSales 204,000 Inventory 204,000Cash 210,000 InstallmentA/R—2010 30,000 InstallmentA/R—2011 80,000 InstallmentA/R—2012 100,0002012—DuringtheYearInstallmentSalesMethod(continues)8-*InstallmentSales 300,000 CostofInstallmentSales 204,000 DeferredGrossProfit—2012 96,000DeferredGrossProfit—2010 10,000DeferredGrossProfit—2011 24,000DeferredGrossProfit—2012 32,000 RealizedGrossProfiton InstallmentSales 66,000 $30,00033.33%$80,00030%2012—EndofYear$100,00032%InstallmentSalesMethod8-*CostRecoveryMethodIftheprobabilityofrecoveringproductorservicecostsisremote,thecostrecoverymethodofaccountingcanbeused.8-*Allentriesarethesameexceptdonotrecordgrossprofituntilallcostsarerecovered.DeferredGrossProfit—2010 5,000 RealizedGrossProfiton InstallmentSales 5,0002011(continues)CostRecoveryMethod8-*Becausethecashcollectedin2011for2011salesislessthanthecostofinventorysold,nogrossprofitwouldberecognizedin2011on2011sales.DeferredGrossProfit—2010 30,000DeferredGrossProfit—2011 10,000 RealizedGrossProfiton InstallmentSales 40,0002012CostRecoveryMethod