QBank # 2219 Which of the following is NOT a requirement for revenue recognition to occur? A) Transactions giving rise to revenue should be arms-length. B) Cash must have been received. Obviously B is not a requirement for revenue recognition… but can anyone tell me why an arms-length transaction IS? Thanks!
I am guessing at this one but I would say that for transactions that are not conducted at an arms length dodgy activities such as channel stuffing can occur. Since this leads to a temporary increase in sales it should not be actually counted as revenue.
aussie_jaco Wrote: ------------------------------------------------------- > I am guessing at this one but I would say that for > transactions that are not conducted at an arms > length dodgy activities such as channel stuffing > can occur. see: Bristol Meyers Squibb http://www.sec.gov/news/press/2004-105.htm
Thanks guys!