WHAT IS MILESTONE METHOD
The milepost method for revenue recognition is primarily used for the research and developmental industry. When using the milestone method, companies record revenue when a phase of the research has been completed or an important precede has been achieved, i.e. completing the research or having the development deliverables completed. These phases and deliverable ar also known as a substantive milestone. agree to FASB the following criteria must be met before a company is able to label a deliverable as a substantive milestone:
The milestone consideration must be proportionate with 1) the sellers performance to achieve the milestone or 2) the delivered items enhanced value resulting from the particular outcome of the vendors performance to achieve the milestone.
The milestone consideration must be related solely to the vendors past performance.
The milestone consideration must be reasonable relative to all deliverables and payment terms in the arrangement
Once the company has set the milestones it will blemish the revenue in the period that the milestone is achieved.
MILESTONE knowledge and DELIVERABLES
The deliverables for SolvGen Inc that compromise to make the milestones are the research phase and the terminus/launch of the instrument systems. Since SolvGen is launching different versions of their instrument systems, thither are multiple milestones that the company will account for.
With the stick out going on for five years the milestone are set by when the phases consider been accomplished and the instrument systems have been launched. There are about five milestones for SolvGen Inc. The first milestone is the negotiation payment...If you want to get a full essay, position it on our website: Orderessay
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