Special Topics in Revenue Recognition

Concept

If modification adds distinct goods at standalone price: separate contract. Otherwise: cumulative catch-up or prospective adjustment.

Key Point

Recognize revenue only for amounts expected to be kept. Record refund liability and asset for right to recover returned goods.

Concept

Principal controls the good before transfer — recognizes gross revenue. Agent arranges transfer — recognizes only commission/fee.

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Practice questions from this module to reinforce what you learned.