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Revenue Recognition

Revenues are realized when goods and services are exchanged for cash or claims to cash (that is, receivables). Revenues are realizable when assets received in exchange are readily convertible to known amounts of cash or claims to cash. Revenues are earned when the entity has performed its duties to be entitled to compensation.
There are 4 main transactions of this kind:
Revenue from selling inventory is recognized at the date of sale (usually interpreted as the date of delivery).
Revenue from performing services is recognized when services have been performed and are billable.
Revenue from permission to use company’s assets (e.g. interests for using money, rent for using fixed assets, and royalties for using intangible assets) is recognized as time passes or as assets are used.
Revenue from selling an asset other than inventory is recognized at the point of sale.
[edit]Revenue recognition criteria according to US GAAP

USSEC's SAB104 states that revenue generally is......


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Approximate Word Count: 825
Approximate Pages: 4 (250 words per double-spaced page)

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