A company believes that it is subject to scrutiny by particular interest groups such as employee unions because it is earning excessive profits. Do you think that this might influence whether the company prefers to recognise revenue over time for its construction contracts, or whether it would prefer to defer profit recognition until the completion of the project? Using this case, discuss whether it be appropriate to recognise revenue at completion of production rather than at the point of sale?

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Revenue recognition is an accounting principle which laid down some conditions that must be met for ... View the full answer