Question: The text discussion of RRA is primarily in terms of
The text discussion of RRA is primarily in terms of the relevance and reliability of the asset valuation of oil and gas reserves. RRA can also be evaluated in terms of the criteria for revenue recognition. Under IAS 18, revenue from the sale of goods is recognized when the significant risks and rewards of ownership have been transferred to the buyer, the seller loses control over the items, the revenue and related costs can be measured reliably, and collection is reasonably assured. Required a. At what point in their operating cycle do most industrial and retail firms regard revenue as having been earned (i.e., realized)? Use the IAS 18 revenue recognition criteria above to explain why. b. Suppose that X Ltd. is an oil and gas producer. X Ltd. uses RRA on its books and prepares its financial statements on this basis. When (i. e., at what point in the operating cycle) is revenue recognized under RRA? Does this point meet the criteria for revenue recognition for sale of goods as given in IAS 18? Explain why or why not.
Answer to relevant QuestionsInventory is another asset for which there is a variety of ways to account under historical cost accounting, including first- in, first- out; last- in, first- out; average cost; etc. Required a. How would inventory ...Electro Ltd. has just commenced operations under ideal conditions of uncertainty. Its cash flows will depend crucially on the state of the economy. On January 1, 2015, the company acquired plant and equipment that will last ...Revenue recognition is a major accounting challenge. Most industrial and retail firms recognize revenue as earned at the point of sale. More generally, according to IAS 18, revenue from the sale of goods should be recognized ...Explain in your own words what “post announcement drift” is. Why is this an anomaly for securities market efficiency? Give two behavioural biases that could generate post announcement drift.You are the senior accountant of a large, publicly traded company that is experiencing a decline of business that management feels is temporary. To meet earnings projections given in its previous year’s MD& A, management ...
Post your question