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Revenue recognition (CFA Series: Income statement)

The key issue with revenue recognition is that accrual accounting means that revenue (sales) are recognized when earned, not when cash is received. IASB has four criteria: * Seller transferred to buyer the risks and rewards of ownership of the goods; * Seller retains neither "continuing managerial involvement" nor effective control over goods sold; * Amount of revenue can be measured (price is known!) * Seller is likely to collect ("probable that economic benefits will flow to seller)
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