Answer
Typically, there are five key steps involved in the revenue recognition process including:
Step 1: identifying the contracts with the customers
Step 2: Identifying separate performance obligations in the contract
Step 3: Determining the transaction prices to be involved.
Step 4: Allocating the transaction price so as to separate performance obligations
Step 5: Recognizing revenue when each performance obligation is satisfied.
Work Step by Step
Its imperative to note that many revenue transactions pose few issues due to the fact that the transaction is initiated and completed at the same time.
