What conditions must be met at the same time for a business to recognize revenue on its books

Revenue from the sale of goods can only be recognized if it meets the following five conditions at the same time:

1) The enterprise has transferred the main risks and rewards of the ownership of the goods to the purchaser;

2) the enterprise neither retains the right to continue management, which is usually associated with ownership, nor does it exercise effective control over the goods sold;

3) the amount of income can be reliably measured;

4) the relevant economic benefits are likely to flow into the enterprise;

5) The associated costs that have been incurred or will be incurred can be reliably measured.

1) The enterprise has transferred the main risks and rewards of the ownership of the goods to the relationship between the buyer's ownership certificate, physical delivery, and the transfer of risks and rewards.

Scenario 1: Transfer of title documents, delivery of physical goods, transfer of risk and reward. The general way of selling goods.

Scenario 2: Transfer of title documents, non-delivery of physical goods, transfer of risk and reward. If the goods are sold by payment and delivery.

Scenario 3: The title document is not transferred, the physical goods have been delivered, and the risks and rewards may not have been transferred.

If the goods are sold by consignment, they need to be grasped according to the situation.

Scenario 4: Title documents are transferred, physical goods are delivered, and risks and rewards are not transferred.

If the goods are sold with return conditions and the possibility of return cannot be determined; The sale of the product requires installation and is an essential part of the sales contract. Wait a minute.

ii) The enterprise neither retains the right to continue management, which is normally associated with ownership, nor does it exercise effective control over the goods sold.

For example, if Company A gives the product to Company B, Company A still has substantial control over the commodity after the sale, which affects the transfer of ownership.

iii) The amount of income can be reliably measured.

The amount of income can be reliably measured, meaning that the amount of income can be determined or reasonably estimated.

Revenue cannot be recognized if the amount of revenue cannot be reasonably estimated. For example, in the case of a new merchandise sale, revenue from the sale of merchandise should normally not be recognized until it is determined.

4) The relevant economic benefits are likely to flow into the enterprise (the probability is greater than 50% and less than or equal to 95%).

The relevant economic benefits are likely to flow into the enterprise, which means that the probability of recovering the price of the sold goods is greater than the probability of not recovering, that is, the probability of recovering the price of the sold goods is more than 50%.

v) The associated costs incurred or to be incurred can be reliably measured.

If the relevant costs incurred or to be incurred cannot be reasonably estimated, revenue should not be recognized and the price received should be recognized as a liability.

For sales revenue: 1The business transfers the main risks and rewards of ownership of the goods to the buyer.

2.The business does not have the right to continue management linked to ownership, nor does it exercise control over the goods that have been sold3The associated economic benefits are likely to flow into the business.

4.Costs can be reliably measured.

5.The amount of income can be reliably measured.

For the labor income, do not use the above 1 and 2 items, add one article, and the completion progress of the transaction can be reliably determined.

In general, the principle is that costs can be reliably measured, and economic benefits are likely to flow to the enterprise.

Summary. Hello dear. What are the five main conditions for revenue recognition:

1. The enterprise has transferred all the main risks and rewards of commodity ownership to the buyer; 2. The enterprise neither retains the right to continue management that is usually associated with ownership, nor does it exercise control over the goods sold; 3) the amount of income can be reliably measured;

Hello dear. What are the five main conditions for revenue recognition: 1. The enterprise has transferred all the main risks and rewards of commodity ownership to the buyer; 2. The enterprise neither retains the right to continue management that is usually associated with ownership, nor does it exercise control over the goods sold; 3) the amount of income can be reliably measured;

4) the relevant economic benefits are likely to flow into the enterprise; 5. The relevant costs that have been incurred or will be incurred can be reliably measured.

Legal analysis: The Accounting Standards for Business Enterprises stipulate that revenue recognition should meet five conditions for the following reasons: (1) the enterprise has transferred the main risks and rewards of the ownership of the goods to the buyer; (2) the enterprise neither retains the right to continue management, which is normally associated with ownership, nor does it exercise control over the goods sold; (3) the economic benefits related to the transaction can flow into the enterprise;

Legal basis: Interim Provisions on Payment of Wages

Article 3 The term "wages" as used in these Provisions refers to the wages and remuneration paid by the employer to the workers in various forms in accordance with the provisions of the labor contract.

Article 4 Wage payment mainly includes: wage payment items, wage payment level, wage payment form, wage payment object, wage payment time, and wage payment under special circumstances.

Article 5 Wages shall be paid in legal tender. Payment in kind and in alternative currency** may not be made.

Article 6 The employer shall pay wages to the workers themselves. If the worker is unable to receive wages for any reason, his relatives or entrusting others to collect the wages on his or her behalf. The employer may entrust the bank to pay the wages on behalf of the employer.

The employer must record in writing the amount and time of payment of the employee's wages, the name and signature of the recipient, and keep it for at least two years for future reference. When paying wages, the employer shall provide the employee with a list of his or her personal wages.

Article 7 Wages must be paid on the date agreed between the employer and the worker. In the case of a holiday or rest day, payment should be made in advance on the nearest working day. Wages are paid at least once a month, and weekly, daily, and hourly wage systems are implemented.

Summary. Hello dear. The answer to the question you described is as follows:

According to Article 4 of Accounting Standards for Business Enterprises No. 14 - Revenue (2006) Cai Kuai [2006] No. 3, the revenue from the sale of goods can only be recognized if the following conditions are met at the same time: (1) the enterprise has transferred the main risks and rewards of the ownership of the goods to the purchaser; ii) The enterprise neither retains the right to continue management, which is normally associated with ownership, nor does it exercise effective control over the goods sold. iii) The amount of income can be reliably measured. (4) The relevant economic benefits are likely to flow into the enterprise; v) The associated costs incurred or to be incurred can be reliably measured.

Hello dear. According to the answer to the question you described, the result is as follows: According to Article 4 of Accounting Standard for Business Enterprises No. 14 - Revenue (2006) Cai Kuai [2006] No. 3, the revenue from the sale of goods can only be recognized if the following conditions are met at the same time:

1) The enterprise has transferred the main risks and remuneration of the ownership of the goods to the purchaser; (2) the enterprise neither retains the right to continue management, which is usually associated with ownership, nor does it exercise effective control over the large commodities that have been sold; iii) The amount of income can be reliably measured. (4) the relevant economic benefits are likely to flow into the enterprise; v) The associated costs incurred or to be incurred can be reliably measured.

Hello dear. The definition of income and the conditions for its recognition shall not only meet the definition of income, but also meet the strict recognition conditions. Income can only be recognized when there is a high probability of an inflow of economic benefits, resulting in an increase in assets or a decrease in liabilities of the enterprise, and the inflow of economic benefits can be reliably measured.

Summary. Hello dear. What are the five main conditions for revenue recognition:

1. The enterprise has transferred all the main risks and rewards of commodity ownership to the buyer; 2. The enterprise neither retains the right to continue to manage the goods that are usually associated with ownership, nor does it exercise control over the goods sold; 3. The amount of income can be reliably measured; 4. The relevant economic benefits are likely to flow into the enterprise to change its business; 5. The relevant costs that have been incurred or will be incurred can be reliably measured.

Hello dear. What are the five main conditions for revenue recognition: 1. The enterprise has transferred the main risks and rewards of commodity ownership to the buyer in the morning; 2. The enterprise neither retains the right to continue management of the goods, which is usually associated with ownership, nor does it exercise control over the goods sold; 3. The amount of income can be reliably measured; 4. The relevant economic benefits are likely to flow into the enterprise and change the business to a high level; 5. The relevant costs that have been incurred or will be incurred can be reliably measured.

1. The company has transferred the main Fengshen disturbance and remuneration on the ownership of the goods to the buyer. 2. The enterprise neither retains the right to continue management that is usually associated with ownership, nor does it exercise effective control over the goods sold. 3. The relevant economic benefits are likely to flow into the enterprise.

Revenue is generated from the day-to-day activities of the business and not from occasional transactions or events; Income is the total inflow of economic benefits that are not related to the capital invested by the owner; Income inevitably leads to an increase in the owner's equity of the business; Income only includes the inflow of economic benefits of the enterprise, and does not include payments collected on behalf of third parties or customers.