Which condition could reverse the revenue?

[poppyking]

I work in an international industrial company, This year we have launched some system to support the business, ex, manage the business unit from PO to site, more detail. However, the revenue recognization is more stirict.

Before, we recoignize the revenue by project or PO progress (percentage), for cost part, provision by revenue progress.

But now, if the site name was not register correctly, or any operation problem, the reveneu will be reversed

In my point of view, revenue could not reverse because of operation error, it should be corresponding with the billing percantage or we say the progress percentage.

Revenue is not a tool to control the correction of each operation point.

Does anybody could give an idea on the revenue recognization?

 

[Shcoll]

I work in an international industrial company, This year we have launched some system to support the business, ex, manage the business unit from PO to site, more detail. However, the revenue recognization is more stirict.

Before, we recoignize the revenue by project or PO progress (percentage), for cost part, provision by revenue progress.

But now, if the site name was not register correctly, or any operation problem, the reveneu will be reversed

In my point of view, revenue could not reverse because of operation error, it should be corresponding with the billing percantage or we say the progress percentage.

Revenue is not a tool to control the correction of each operation point.

Does anybody could give an idea on the revenue recognization?

My understanding is that once revenue is recognized, there is tax consequences, so if the company, or the source or sources from which the revenue is been recognized from is not registered or is not properly documented, when there is time to file the tax return or pay estimated tax liability, that source or sources will not be correctly identify in the tax filing document. So it good to resolved the registration or the correction of the source or sources name before recognizing the revenue. The part of the revenue waiting to be recognized can be recorded in Deferred Revenue Account. This what I can think of now, there maybe other reasons.