Conditions for Revenue Recognition - SFAC 5 | CFA Level 1 Exam Prep

Conditions for Revenue Recognition

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Question

According to SFAC 5, the condition(s) that must be met for revenue recognition to take place is

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A. B. C. D. E.

E

The firm must have provided all or virtually all the goods/services for which it is to be paid and it must be possible to measure the total expected cost of providing these goods/services. Also, the seller must reasonably estimate the probability of nonpayment; if this cannot be assured, assurance of payment is not satisfied.