Under IAS 18, if four out of the five conditions for recognizing revenue from the sale of goods are met, and the entity is 75% certain that revenue will be recognized as a result, how would a $100,000 sale be recognized at the time of the sale?
A. The recognition of the entire sale must be deferred until the fifth condition has been met.
B. $75,000 of the sales price can be currently recognized and $25,000 will be treated as a liability.
C. The entire $100,000 sales price can be currently recognized since most of the conditions have been met.
D. None of the above represents a proper treatment of this sale.
Answer:B
Under IAS 18, if four out of the five conditions for recognizing revenue from the sale of goods are met, and the entity is 75% certain that revenue will be recognized as a result, how would a $100,000 sale be recognized at the time of the sale?
A. The recognition of the entire sale must be deferred until the fifth condition has been met. B. $75,000 of the sales price can be currently recognized and $25,000 will be treated as a liability. C. The entire $100,000 sales price can be currently recognized since most of the conditions have been met. D. None of the above represents a proper treatment of this sale.