Revenue recognition is often done by companies

Revenue recognition is often done by companies Kieso, et al (2002:5) consists of:(1) Recognition of revenue at the time of sale (delivery);(2) Recognition of revenue before delivery;(3) The recognition of revenue after delivery;(4) Recognition of revenue for special sale - franchises and consignment. Here's an explanation of the four recognition above opinion:
1. The recognition of revenue at the time of sale (delivery)Revenue from manufacturing activities as well as sales are generally recognized upon sale (point of sell) which usually means there is a handover. However, problems arise in practice due to three situations, namely:a) Sales of the Repurchase AgreementIn this situation, the property has been transferred to the buyer's legal but the risk of ownership remain with the seller. For that if there is an agreement to buy back the tertntu and prices can cover all costs plus inventory related cost of ownership, the inventory and related liability that remains on the books selling in other words not a sale.
b) the right of return SalesThe accounting treatment for this kind of situation is actually normal, but if the high level of returns it is necessary to delay the sale until the right of return reporting expired. For that there are three alternative methods of revenue recognition if the seller is experiencing this situation are: (1) Do not record the sale until all return rights expire, (2) Recording the sale, but reducing sales by an estimated future returns, and (3) Recording the sale and take into account returns in the event.
If the sale of the right to return the revenue from the sale is recognized when the sale if it meets the following six conditions: (1) for the seller to the buyer is relatively fixed (fixed) or can be determined on the date of the sale, (2) The buyer has paid the seller, or the buyer is obligated to pay the seller, and the obligation is not dependent on the resale of the product, (3) Liabilities buyer the seller is not going to change in the event of theft or physical destruction or damage to the product, (4) Purchasers who acquire the product for resale has economic substance apart from that provided by the seller, (5) the seller does not have significant obligations for future performance to directly cause the resale of the product by the purchaser, and (6) Number of future returns can be reasonably estimated.
If the sales revenue and cost of goods sold are not recognized because the six conditions are not met should be recognized when the right of return is substantially expired or after the sixth condition is satisfied.
c) Trade LoadingTrade Loading and Channel Stuffing is an insane practice; cunning, and not economic; through this practice to persuade the manufacturer (by sales, profits, and market share they do not really have) their customers to buy the product than they can sell back or by In other words bookkeeping records today for an upcoming earnings.
2. Revenue recognition prior to submissionThe most concrete example of the recognition of income prior to submission of a "long-term construction contract accounting". Long-term contracts often stipulate that the seller (contractor) can charge the buyer at the time interval when the various stages of the project have been achieved. There are two methods of accounting for long-term construction contracts are recognized by the accounting profession, namely:
a) the percentage of completion methodRevenue and gross profit are recognized each period based on the progress of the construction, ie the percentage of completion.This method is used only if the estimate of progress toward completion, revenues, and costs reasonably reliable, and meet the following requirements: (1) The contract clearly define the rights that can be enforced enforcement about the goods or services supplied and received by parties involved in the contract, the consideration to be exchanged, as well as ways and means of solving, (2) The buyer may be expected to fulfill all obligations under the contract, and (3) The Contractor may be expected to perform the contractual obligation.
b) completed contract methodRevenue and gross profit is recognized only when the contract settled.This method is only used (1) If an entity has a particularly short-term contracts, or (2) If the conditions for using the percentage of completion method can not be met, or (3) If there are dangers inherent in the contract outside of normal business risk and repetitive.
3. The recognition of revenue after handoverIn some cases, the collection of the sale price can not be reasonably ascertained that the recognition of deferred revenue will be. There are two methods that can be used in menagguhkan revenue recognition until cash is received, namely: (1) installment sales method of accounting and (2) the cost recovery method.
a) the installment sales method of accounting (installment sales method)In the installment sales method of accounting recognizes income in the billing period and not in the period of sale. Installment sales method of accounting is justified on the basis that if there is no viable approach for estimating the rate ketertagihan, revenue should not be recognized until cash successfully billed.
b) The method of recovery of costs (cost recovery method)In the cost recovery method, no profit is recognized until cash payments by the buyer exceed the cost of merchandise sold for the seller. After all costs recovered, any additional cash collection are included in earnings. The income statement for the period sales report sales revenue, cost of goods sold, and gross profit both the amount recognized in the current period and the amount deferred. Deferred gross profit are deducted from the related accounts receivable balance. The income statement later reported gross profit as a separate post if gross revenue is recognized when produced.
In some situations cash is received prior to the delivery or transfer of the property and recorded as a deposit for the sale has not been completed. This method is called the method of deposit (deposit method). According to this method sales reported cash received from the buyer as a deposit on the contract and classifies the balance sheet. In addition, the seller also recorded as depreciation expense for the period the property. According to this method there is no revenue or profit to be recognized until the sale is completed. At the time deposit account is closed and one of the above revenue recognition method is applied.
4. Revenue recognition for sales transactions specificallya) Franchise
 Peruasahaan franchisees derive their income from the following sources, namely: (1) from the initial franchise sales and assets assembled for services, and (2) of the fees (fee) based on the continuous operation of the franchise. Franchisor is a party providing the right business in the franchise, and the franchisee is a business megoperasikan warlaba.
In the beginning of the franchise agreement fees are recorded as revenue when and only when the franchisor implement substantial implementation services required to execute and billing it certainly is worth the fee. Dues sustainable franchise is recognized as revenue when produced and can be collected from the franchisee.
b) ConsignmentIn a consignment agreement, consignors (the manufacturer) to send merchandise to consignee (dealer) that acts as an agent that receives merchandise and agreed to sell and keep the goods. Cash received from customers sent to consignors after deducting sales commissions and all the expenses that can be charged.
Revenue is recognized only after the consignors receive notifications of sales and delivery of cash from the consignee.