Question:
Revenue recognition for most installment sales occurs at the point of delivery of the product or service.
Under what circumstances would a seller delay revenue recognition for installment sales beyond the
delivery date?
Answer:
If the installment sale creates a situation where there is significant uncertainty concerning cash collection
and it is not possible to make an accurate assessment of future bad debts, revenue and cost recognition
should be delayed beyond the point of delivery.
Revenue recognition for most installment sales occurs at the point of delivery of the product or service.
Under what circumstances would a seller delay revenue recognition for installment sales beyond the
delivery date?
Answer:
If the installment sale creates a situation where there is significant uncertainty concerning cash collection
and it is not possible to make an accurate assessment of future bad debts, revenue and cost recognition
should be delayed beyond the point of delivery.
