FAR Chapter 2 Financial Reporting Disclosures

Question 1

What is the five step approach to revenue recognition?

Answer 1

1. Identify the contract with the customer
2. Identify the separate performance obligations in the contract
3. Determine the transaction price
4. Allocation the transaction price to the separate performance obligations
5. Recognize revenue when or as entity satisfies each performance obligation

Question 2

What items are required in the supplementary disclosure using the indirect method

Answer 2

Income taxes and interest paid