Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 2 - Conceptual Framework for Financial Reporting - Review and Practice - Questions - Page 62: 21


Typically, there are five key steps involved in the revenue recognition process including: Step 1: identifying the contracts with the customers Step 2: Identifying separate performance obligations in the contract Step 3: Determining the transaction prices to be involved. Step 4: Allocating the transaction price so as to separate performance obligations Step 5: Recognizing revenue when each performance obligation is satisfied.

Work Step by Step

Its imperative to note that many revenue transactions pose few issues due to the fact that the transaction is initiated and completed at the same time.
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