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Chapter 17. Revenue Recognition and Inco... > Recognizing Revenue at Completion of...

Recognizing Revenue at Completion of Production

For certain types of commodities, such as agricultural products and some precious metals, it is best to recognize revenue when production is complete. To recognize revenue when production has been completed, it is necessary to meet the following criteria:

  • The product is sold in a market with a reasonably assured selling price.

  • The costs of selling and distributing the product are not significant and can be reasonably estimated.

  • Production is considered the most critical event in the earning process, not the sale itself.


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