Page 7 - FINAL CFA I SLIDES JUNE 2019 DAY 7

Instalment Sales (US GAAP versus Session Unit 7:

IFRS), p45 24. Understanding Income Statements

Collectability certain? Use normal revenue recognition criteria

Collectability cannot Instalment method
US GAAP be reasonably estimated? Typical in sales of real estate

Collectability is highly uncertain? Cost recovery method

tanties

Expected Profit as % of Sales = 20% ( $1000 - $800)
$1000