Explaining revenue recognition policies differ


Q1) Many companies sell products permitting their customers right to return merchandise if they are not satisfied. Because return of merchandise can retroactively negate benefits of having made a sale, seller should meet certain criteria before revenue is recognized in situations when right of return exists. SFAS No.48,Revenue recognition when right of return exists, lists criteria, the most criteria of which is that seller should be able to make reliable estimates of future returns.

Why do two revenue recognition policies differ?

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Accounting Basics: Explaining revenue recognition policies differ
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