Questions from Intermediate Accounting


Q: We recognize service revenue either at one point in time or over

We recognize service revenue either at one point in time or over a period of time. Explain the rationale for recognizing service revenue using these two approaches.

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Q: What characteristics make a good or service a performance obligation?

What characteristics make a good or service a performance obligation?

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Q: How does a seller allocate a transaction price to a contract’s performance

How does a seller allocate a transaction price to a contract’s performance obligations?

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Q: What must a contract include for the contract to exist for purposes

What must a contract include for the contract to exist for purposes of revenue recognition?

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Q: How might the definition of “probable” affect determining whether a

How might the definition of “probable” affect determining whether a contract exists under IFRS as compared to U.S. GAAP?

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Q: When a contract includes an option to buy additional goods or services

When a contract includes an option to buy additional goods or services, when does that option give rise to a performance obligation?

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Q: Is variable consideration included in the calculation of a contract’s transaction price

Is variable consideration included in the calculation of a contract’s transaction price? If so, how is the amount of variable consideration estimated?

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Q: How are sellers constrained from recognizing variable consideration, and under what

How are sellers constrained from recognizing variable consideration, and under what circumstances does the constraint apply?

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Q: Willingham Construction is in the business of building high-priced,

Willingham Construction is in the business of building high-priced, custom, single-family homes. The company, headquartered in Anaheim, California, operates throughout the Southern California area. Th...

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Q: Is a customer’s right to return merchandise a performance obligation of the

Is a customer’s right to return merchandise a performance obligation of the seller? How should sellers account for a right of return?

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