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ExerciseRevenue recognition: Assume that after graduation you have the oppor-tunity to join a professional organization related to your work. The organization re-quires a one-time, nonrefundable

ExerciseRevenue recognition: Assume that after graduation you have the oppor-tunity to join a professional organization related to your work. The organization re-quires a one-time, nonrefundable $250 initiation fee and a membership agreement cancelable with 30 days notice to pay $25 dollars per quarter to use the club for the next six quarters. How are the $250 and the $25 per month accounted for under cur-rent U.S. GAAP and the proposed new IFRS? In completing your answer follow the following steps:

1. Identify the contract with the customer. 2. Identify the separate performance obligations in the contract. 3. Determine the transaction price for the entire contract. 4. Allocate the transaction price to the separate performance obligations. 5. Recognize revenue when each separate performance obligation is satisfied.

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