Summary of Percentage of Completion, Cost Recovery,Completed Contract Methods (FA Tutorial #50)
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In this video I elaborate as to why we should avoid using the critical point method for long term contracts. We have to recognize revenue gradually using either the percentage of completion or cost recovery method. Completed contract method can be used under ASPE and is a form of critical point recognition. I decided to not include the installment sales method until a later point (or maybe our intermediate accounting section) since it's slightly more abstract.
Remember that IFRS uses percentage of completion unless the method is not valid, in which case you'll use cost recovery (or installment, but we've yet to go over it yet)
ASPE or PE GAAP or Canadian GAAP allows the completed contract method or the percentage of completion method.
Enjoy! If you have any questions, feel free to leave one below!
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In this video I elaborate as to why we should avoid using the critical point method for long term contracts. We have to recognize revenue gradually using either the percentage of completion or cost recovery method. Completed contract method can be used under ASPE and is a form of critical point recognition. I decided to not include the installment sales method until a later point (or maybe our intermediate accounting section) since it's slightly more abstract.
Remember that IFRS uses percentage of completion unless the method is not valid, in which case you'll use cost recovery (or installment, but we've yet to go over it yet)
ASPE or PE GAAP or Canadian GAAP allows the completed contract method or the percentage of completion method.
Enjoy! If you have any questions, feel free to leave one below!
* Notepirate is privately owned and exclusive to Notepirate.com.*
Website: http://www.notepirate.com
Follow us on Facebook: https://www.facebook.com/pages/Note-P...
Follow us on Twitter: Twitter: notepirate
We appreciate all of the support you guys have given us. Be apart of the mission to help us reach more students by subscribing, thumbs upping and adding the videos to your favorites!
10 سال پیش
در تاریخ 1393/10/29 منتشر شده
است.
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