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CMA Part 1
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1. External financial reporting decisions
2. Planning, budgeting, and forecasting
3. Performance management
4. Cost management
5. Internal control
6. Technology and analytics
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1.2.11.1.1 Learning outcomes
Achievable CMA Part 1
1. Financial transactions
1.2. Income statement
1.2.11. Revenue recognition
Our CMA Part 1 course is currently in development and is a work-in-progress.

Learning outcomes

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The learning outcome statement related to revenue recognition are as follows:

  1. apply revenue recognition principles to various types of transactions
  2. demonstrate an understanding of revenue recognition for contracts with customers using the steps required to recognize revenue
  3. demonstrate an understanding of the matching principle with respect to revenues and expenses, and be able to apply it to a specific situation

The following pages cover the five-step revenue recognition model and the US GAAP vs. IFRS differences in revenue recognition.

Revenue recognition principles

  • Identify when and how revenue is recognized
  • Apply principles to different transaction types
  • Ensure revenue reflects transfer of goods/services

Contracts with customers

  • Follow specific steps for revenue recognition:
    • Identify contract
    • Identify performance obligations
    • Determine transaction price
    • Allocate price to obligations
    • Recognize revenue as obligations are satisfied

Matching principle

  • Match revenues with related expenses
  • Recognize expenses in same period as associated revenues
  • Ensures accurate profit measurement for a period
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Next  | 1.2.11.1.2 Revenue recognition steps
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Learning outcomes

The learning outcome statement related to revenue recognition are as follows:

  1. apply revenue recognition principles to various types of transactions
  2. demonstrate an understanding of revenue recognition for contracts with customers using the steps required to recognize revenue
  3. demonstrate an understanding of the matching principle with respect to revenues and expenses, and be able to apply it to a specific situation

The following pages cover the five-step revenue recognition model and the US GAAP vs. IFRS differences in revenue recognition.

Key points

Revenue recognition principles

  • Identify when and how revenue is recognized
  • Apply principles to different transaction types
  • Ensure revenue reflects transfer of goods/services

Contracts with customers

  • Follow specific steps for revenue recognition:
    • Identify contract
    • Identify performance obligations
    • Determine transaction price
    • Allocate price to obligations
    • Recognize revenue as obligations are satisfied

Matching principle

  • Match revenues with related expenses
  • Recognize expenses in same period as associated revenues
  • Ensures accurate profit measurement for a period

More from Revenue recognition

  • Revenue recognition steps
  • Contract assets and contract liabilities
  • Revenue transactions
  • Point in time recognition method
  • Over time recognition method