1. What is the authoritative guidance for revenue recognition when right of return exists?
2. When is this guidance important for a company?
3. Sales with high rates of return can ultimately cause inventory to be misstated. Why are returns allowed? Should different industries be able to make different types of return policies?
4. In what situations would a reasonable estimate of returns be difficult to make?
Image text transcribed for accessibility What is the authoritative guidance for revenue recognition when right of return exists? When is this guidance important for a company? Sales with high rates of return can ultimately cause inventory to be misstated. Why are returns allowed? Should different industries be able to make different types of return policies? In what situations would a reasonable estimate of returns be difficult to make?