FARS RESEARCH

July 8, 2009
FAR # 2AC 313

Page 960, Chapter 18; passkey Research: Financial Accounting and Reporting


To address the issues of tax revenue recognition, our companionship needs to look at The Financial Accounting Standards come along (FASB) Codification 605-15. The topic covered in section 605 has to do with revenue recognition, and sub-section 15 deals with produces. Since our telephoner wants to know how changing our hark backs insurance policy will affect how we recognize revenue, we need to look at paragraph 605-15-25-1, which explains the conditions that must be met for our company to recognize revenue at the time of the sales. If the conditions are met sub-section 25-2, explains that any costs or losses that whitethorn be expected in club with any fork up may be accrued in accordance with Subtopic 450-20. Sub-section 25-3 addresses the issue of making reasonable estimates on the pith of returns. There are many factors that could impair a companys ability to make reasonable estimates of returns, and these are communicate in sub-section 23-4.

Right of Return: the option of a vendee to give goods back to the seller for full credit.



> The buyers right to return merchandise precludes revenue recognition by the seller at the time of sale unless all of the following conditions are met:
(1) The interchange price is determinable.
(2) The buyers obligation to pay is not contingent on resale of the product
(3) The buyer must pay for item if lost
(4) The learnedness by buyer has economic substance.
(5) Future performance by the seller is not required for resale by buyer.
(6) Future returns may be reasonably estimated.
If these conditions are not satisfied, revenue and link expenses must be deferred until the conditions are met or the right of return has expired.

Some of the factors that may impair the ability to make a reasonable estimate of future returns are:
(1.) The susceptibility of the product to significant external...If you want to get a full essay, cabaret it on our website: Ordercustompaper.com



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