{"id":5051,"date":"2014-09-22T06:15:36","date_gmt":"2014-09-22T04:15:36","guid":{"rendered":"http:\/\/www.officetodo.com\/public\/?p=5051"},"modified":"2014-09-21T06:16:33","modified_gmt":"2014-09-21T04:16:33","slug":"when-should-a-sale-be-recognized-over-a-longer-period-of-time","status":"publish","type":"post","link":"http:\/\/www.officetodo.com\/public\/when-should-a-sale-be-recognized-over-a-longer-period-of-time\/","title":{"rendered":"When should a sale be recognized over a longer period of time?"},"content":{"rendered":"

Something that\u2019s important to understand is that there are times when sales revenue is not a one-off transaction, but rather a stream that should be recognized over a period the agreement is in force or the service is being provided.\u00a0<\/p>\n

Revenue is rarely accounted cash basis (when money is actually collected), but when risks and rewards are transferred or the obligation to provide defined service (-s) has ended. It\u2019s therefore crucial to read through the agreements, understand with the respective parties together the expectations.<\/p>\n

Revenue from services is often the most complicated. An often time the sale of some goods may include also a sale of a service and it\u2019s not just understanding the difference, but encompassing that this service may require a different treatment on the accounts as well.<\/p>\n

If the service is really one-off thing, e.g. putting some equipment together and this doesn\u2019t take long, say a week or two, the revenue from this can be measured and accounted fairly easily within the month the service is provided.<\/p>\n

However, it\u2019s important to understand if there are some activities the seller is required to provide for a longer period than just a week or two. Such services may require not only accounting over a period of time, but they may also require finding their price (on occasions when the service itself doesn\u2019t have a price separate within the agreement).<\/p>\n","protected":false},"excerpt":{"rendered":"

Something that\u2019s important to understand is that there are times when sales revenue is not a one-off transaction, but rather a stream that should be recognized over a period the agreement is in force or the service is being provided.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[69],"tags":[],"class_list":["post-5051","post","type-post","status-publish","format-standard","hentry","category-1-17-accounts-receivable"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t