Accounting Revenue Recognition Research Paper Example | Topics and Well Written Essays - 500 words

Accounting Revenue Recognition - Research Paper ExampleSolvGen Inc has agreed to triplet separate deliverables a) The moneymaking(prenominal) launch of the first instrument system Version 1- Delivered March 31 b) The commercial launch of an improved instrument system Version 2- Pending development c) The commercial launch of newly improved instrument system Version 3-Pending development. The other part of their agreement is the five year diffusion and license contract with Careway Inc. Under this agreement Careway will have the right to market and distribute their patented instrument systems developed in conjunction with SolvGen. SolvGen is responsible for producing the necessary volume to meet the demand requirements of CareWay afterwards each product launch. The compevery is responsible to maintain adequate inventory and production quality harbor to meet client requirements. 2) Based on the generally accepted explanation principles (GAAP) it is common practice to subroutin e the revenue recognition principle which states that any current revenue has to be recognized in the accounting period on which it is earned. Therefore a company cannot realize as current revenue any payments that are part of a long term contract these payments should be differed and systematically recognized over the remaining time of the agreement or contract.