In this lesson, Nick Palazzolo, CPA, breaks down the principles of revenue recognition in an easily digestible manner. Using relatable examples like Chipotle and Verizon, he illustrates how to determine when revenue should be recognized. Nick guides through the five steps starting from identifying the contract with a customer to allocating the transaction price to the performance obligations. He emphasizes real-world applications, showing how revenue is recognized over time or at a point in time, such as with a monthly phone service or an instantly enjoyable burrito bowl. Nick ensures to clarify that whether it's a tacit agreement or a signed contract, the core concept remains the same: recognize revenue when the earning process is complete.
Lesson: Guidelines for Revenue Recognition
In this lesson, Nick Palazzolo, CPA, breaks down the principles of revenue recognition in an easily digestible manner. Using relatable examples like Chipotle and Verizon, he illustrates how to determine when revenue should be recognized. Nick guides through the five steps starting from identifying the contract with a customer to allocating the transaction price to the performance obligations. He emphasizes real-world applications, showing how revenue is recognized over time or at a point in time, such as with a monthly phone service or an instantly enjoyable burrito bowl. Nick ensures to clarify that whether it's a tacit agreement or a signed contract, the core concept remains the same: recognize revenue when the earning process is complete.
Updated: Oct. 20, 2021 Create an account