When should revenue be recognised? Are there exceptions to the general rules ?

Explanation

The revenue recognition principle may be a cornerstone of accruement accounting in conjunction with the matching principle. They each verify the accounting amount within which revenues and expenses are recognized. per the principle, revenues are recognized after they are realized or realizable, and are earned usually once product are transferred or services rendered), notwithstanding once money is received.




There are some exceptions to the present general rule of revenue recognition. just in case of contracts like construction work, that take very long time, say 2-3 years to complete, proportionate quantity of revenue, supported a part of contract completed by the tip of the amount is treated as realized. Similarly, once product is sold on rent purchase, the quantity collected in installments is treated as realized.