Monday, June 10, 2019

Revenues and Fair Values Assignment Example | Topics and Well Written Essays - 1000 words

Revenues and Fair Values - Assignment ExampleQuestion 1, Part I Outline the key requirements of IAS 18 RevenuesIAS 18 prescribes the accounting treatment for tax income arising from certain types of transactions and events. It defines revenue as the gross inflow of economic benefits, such as cash, receivables, and other assets, arising from the ordinary operating activities of an enterprise, such as gross revenue of goods or services, interest, royalties, and dividends (IAS 18 7). Revenues are different from gains, a type of income which also represent increases in economic benefits but may not arise in the course of the ordinary activities of an enterprise. The key requirements of IAS 18 are reliability, recognition, and measurement of revenue. Revenue should be measured at the fair value of the consideration receivable (IAS 18 9). An exchange for goods or services of a similar nature and value is not regarded as a transaction that generates revenue, which only applies to exchanges of dissimilar items (IAS 18 12).IAS 18 has the following basic principles to guide accountants on the timing of revenue recognitionSignificant risks and/or rewards of ownership are transferred to the buyerNo continuing sake nor control associated with ownershipAmount of revenue can be measured reliably

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