This checklist is designed to ensure that all revenue recognition principles are followed, ensuring compliance with accounting standards and accurate financial reporting.
Ensure all sales contracts are reviewed for terms and conditions relevant to revenue recognition.
Determine the distinct performance obligations within each contract.
Evaluate the transaction price and allocate it to performance obligations.
Record revenue when control of the goods or services is transferred to the customer.
Maintain thorough documentation of the revenue recognition process for audit purposes.
Have a designated person review and approve all revenue entries before finalizing.
Regularly check for any amendments or changes in contracts that may affect revenue recognition.