Revenue Recognition Not always simple... Percent Complete Method Application of Allowances Contract Cancellation Five Steps in Revenue Recognition: 1 2 3 4 5 Management incentive - special note... Public Companies - - special note... Accounts Receivable Risk Factors 1 2 3 4 5 Beware of... 1 2 3 Revenue Fraud 1 2 3 4 5 6 7 8 Balance Confirmations Positive Negative