From the course: Running a Profitable Business: Revenue Recognition
Welcome
From the course: Running a Profitable Business: Revenue Recognition
Welcome
- Hi, I'm Jim Stice. I'm a professor of accounting at Brigham Young University. This is my brother, Kay. - I'm also professor of accounting at BYU. - In this course, we address the financial reporting issues of revenue recognition. (Kay) Revenue Recognition is the process of deciding when a sale should be reported in a company's accounting records. When has the company enough economic activity to merit reporting a sale? - And when has the company become convinced that the customer's going to pay for that good or service? - Exactly. A company reports revenue when it has delivered economic value, and had an assurance that it has received, or will receive cash. (Jim) Now in this course, we will discuss the basics of Revenue Recognition, along with the complications associated with recognizing revenue and Multiple-Element Transactions. (Kay) We will discuss the interesting controversies that swirl around the topic of Revenue Recognition. We will look at the acrimonious history of the accounting rules for Revenue Recognition. - And we will look at the notorious revenue recognition frauds involving fake carpet restoration jobs, channel stuffing, whatever that is, and deceptive shading of the truth to meet revenue targets. - And we will illustrate the connection between the amount of revenue companies report in their financial statements, and the market values of those companies. - Now, before taking this Revenue Recognition course, you might consider taking our accounting fundamentals course. Among other things, that course introduces you to the financial statements and their use. - With that said, we have designed this Revenue Recognition course to be self-contained, and we carefully explain any terminology that we use. - In short, this is an introductory course, with no prior accounting knowledge necessary. (Kay) Let's learn about Revenue Recognition!
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