What do we mean by Aggressive Revenue recognition and name a few examples

March 11th, 2011 Comments off
Share |

Aggressive Revenue recognition are aggressive techniques that are deploy to result in reporting of accounting for revenue earlier than may be appropriate even though they may not technically violate GAAP 

Examples are:

  • Bill-and-hold sales arrangements ( invoicing a sale without shipping merchandise)
  • Sales-type leases (lessor reporting leases as a sale, particularly when the lessee is treating the transaction as an operating lease)
  • Recording revenue at the time a contract is signed but before delivery of goods or services
  • Recording revenue prior to fulfilling all of the terms of contract for example installation or verification that computer equipment or software is functioning according to contract terms and
  • Using swaps or barter arrangements to generate sales

Comments are closed now.