[lexus423]

Ran into a contract at work that had a few people scratching theirs heads about when to recognize revenue.

I have a pretty good idea of what the right answer is but was curious to see what you all thought.

A piece of development land was sold at Dec 31 for $150k. The party that purchased the land is building a project on it. Based on the contract signed 2013 we are entitled to several milestone payments below:

$500k for signing of construction contract-2014

$300k for ground breaking-2014

$500k for completion of project-2015

When and how much would revenue be recognized in 2013,14 and 15?

FAR- 2014
AUD- 2014
REG- 2014
BEC- 2014

[stoleway]

The land is sold for 150k , why is the total payment around $1300000??

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[stoleway]

The land is sold for 150k , why is the total payment around $1300000??

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[musicamor]

I don't know that the fact pattern is complete. There is a major disconnect between the sales price and the milestone payments. Also, depending on the method of revenue recognition used (complete contract or % complete), the answer can be different.

Texas CPA - licensed in 2012!!!

[musicamor]

I don't know that the fact pattern is complete. There is a major disconnect between the sales price and the milestone payments. Also, depending on the method of revenue recognition used (complete contract or % complete), the answer can be different.

Texas CPA - licensed in 2012!!!

[Author]

Replies