शैडोइंग अभ्यास: Revenue Recognition ASC 606. Step 1: Identify the Contract. - वीडियो के साथ अंग्रेजी बोलना सीखें

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Hello and welcome to the session in which we would look at revenue recognition.

What is revenue recognition?

Revenue recognition is when do we recognize revenue?

When do we record revenue?

Revenue is one of the most important figures for companies.

Revenue drives everything else on the financial statements.

It's called the top line for a reason.

It is the top line and it's the most important.

It drives your earnings before interest and taxes.

It drives your earnings per share, exist without revenue or they might be able to exist for a short period of time,

very short period of time, if the investors kept investing money.

But without revenue, you can't have a profit.

Without revenues, you should not be incurring any expenses.

So revenue is important.

And in the real world, revenue is subject to fraud.

So that's why revenue recognition is important.

GAAP had numerous standards in the past, and this is, I'm going to give you a little bit of background information, over 100 standards for revenue recognitions, and some of them were inconsistent with each other.

That's in the U .S.

Globally, IFRS had only one general standard and some limited guidance.

So what they decided to do, they decided to combine and create one set of revenue recognition for both U .S and IFRS.

contract with customers and the key word is contract we need to talk a little bit more about contract.

So the purpose of this convergence is to improve comparability across countries,

companies, industries, because if investors wants to learn about Sony's revenue,

it should be easy to read Sony's financial statement or if you want to learn about a European company, Adidas or a US company, it should be all the same in how they recognize revenue.

The purpose also is to simplify the preparation of financial statement and also help the users understand how revenue is recognized.

Specifically, they used something called the asset liability approach.

And this approach said that revenue is driven by measurement of assets and liabilities arising from the contract.

So basically what they said, when we need to recognize revenue, look at the contract and see how the contract is changing the assets of the company.

For example, account receivable, do you have,

do you expect, you have a legal expectation because of this contract.

So this is what they said.

The contract will drive this asset liability, what's called asset liability approach.

So revenue is driven by how the contract is changing your assets and your liabilities.

Specifically, they have five steps of revenue recognition.

And to illustrate those five steps, I'm going to just work a simple example, but those five steps will be covered in details later on.

In this session, I will cover one step of them,

and that's So let's assume Tesla entered into a contract to sell the Model Y for 75 ,000.

This is the Model Y to be delivered 60 days from today.

First thing is that we have a contract.

Well, the answer is yes, we have a contract.

Maybe the customer went online to Tesla and input the information, and that's the contract.

Or maybe the customer walked into Tesla's dealership in one of the malls in the US and signed some paperwork.

So somehow there is a contract.

Does it have to be in writing?

We'll talk about the contract later on on the next slide.

But the point is there is a contract.

There is an agreement between a buyer and Tesla.

That's the first thing.

The second thing is the contract will have to identify the separate performance obligation in the contract.

Now for the sake of simplicity, there's only one performance obligation and that is what?

Tesla has to deliver the car to the customer.

That's it.

So identify the separate there's only one because we're keeping this example simple.

One obligation and that's to deliver the car.

Now if we for example

if Tesla will would want to sell a maintenance agreement on the vehicle then that will be a separate

separate performance obligation

but here we're assuming one obligation step three in the count

in the in the revenue recognition five step process is determine

the transaction price that's easy the transaction price is 75 000

we're going to have a whole session about determining the transaction price

which is because it's sometime it's not as straightforward

or simple then we're going to allocate once we determine the

price once we determine the price we're going to allocate the

price to the to the up to the obligation to the separate performance obligation One thing here, one price, one obligation, it's easy.

So the 75 ,000 is toward the car.

And Tesla would recognize revenue when each performance obligation is satisfied.

They only have one and that one is to deliver the car.

So revenue is recognized when Tesla performed the obligation.

And when does Tesla perform the obligation?

They're hoping 60 days from today they will perform the obligation.

and cover step one I would like to remind you whether you are a student

or a CPA candidate to take a look at my website farhatlectures .com my motto is saving CPA candidate

and accounting students one at a time by providing new resources

I don't replace your CPA review course I'm a useful addition to your CPA review course

and this is a partial list of all my accounting courses intermediate international governmental

or the tax so on and so forth I provide your lectures

and multiple choice my CPA material is aligned with your backer Wiley gleam or miles, I also give you access to 1 ,500.

Originally released, previously originally released, AICPA questions with detailed solution.

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Like this recording, share it with others, connect with me on Instagram.

I'm trying to grow my Instagram, Facebook, Twitter, and Reddit.

So let's now dive a little bit more into step one, identify the contract with customer.

Well, what is a contract?

That's the first thing we need to know.

Well, it's an agreement that create enforceable rights and obligation.

Two parties agree to the contract.

You cannot have a contract with one party agreeing if the other party don't agree.

If you want to sell me something, you send me a contract.

Well, you send me the contract.

You signed it.

Well, if I didn't sign the contract, there is no agreement.

So it has to be by both parties.

And the contract doesn't have to be in writing.

If it's in writing, it's helpful, it's good, it's better to have a contract in writing, but sometimes it's not feasible to have a contract in writing.

Because let's assume you want to buy something from the store, you walk into the store, you pick it up from the shelves, you walk, to the register and you buy it.

You don't need a contract to do that.

So basically, or you don't even have to talk to anyone.

For example, if you pick up something at the supermarket, sometime you have what's called the self -checkout.

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You check it out yourself.

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That's also a contract.

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You're taking the item.

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you're paying for it so the contract is implied sometimes the contract is oral

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if two individual agree and that could be two car dealer car dealerships

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or any two individuals can agree to buy and sell

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and as long as they trust each other it's an oral contract

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or sometimes it's the contract is customary for example

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when your inventory reaches a certain level i send you the

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product i don't have to talk to you this is customary in the industry

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because you need the product and you are relying on me so the contract doesn't have to be in writing

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it can be implied so

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but the point is you have to have some sort of a contract this is the foundation

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if you don't have a contract whether it's in writing

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or implied you don't have revenue

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because you need something okay the contract should also have five

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additional criteria we're going to go over these criteria separately one

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is commercial substance commercial substance sometimes it's called you know a protective clause not to inflate revenue simply put

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when you go into a contract with

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actual business transaction

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and you're not only shuffling papers to inflate your revenue simply

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put I would say okay let's do this let's sign this contract for this period

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and I will sell you the stuff right and next period I will buy it back no

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What you did is you inflated your revenue and you're buying back the product.

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Well, it has to have an actual business reason, not shuffling papers.

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It has to have business sense, economic substance.

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We are entering into a transaction because there's a benefit for you

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and a benefit for me in a sense that it's a business benefit.

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Both parties, as I told you, have to approve the contract.

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Otherwise, the contract is not enforceable.

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And we talked about this.

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Also, you cannot have a termination clause that you can easily exit.

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If we have a contract and you can easily exit, there are no consequences for breaking the contract.

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You really have no contract because you can at any point leave, exit.

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There is no real or true contract.

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payment later on there's one whole section about how to determine

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the payment you have to have enough information to determine the price

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or be able to estimate the price on the contract

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if it's easy like in our contract with tesla that's fine okay

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or for example let me just kind of make this little bit more interesting for example

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when you bought this tesla tesla would say look

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if our stock price above a thousand dollar okay we're gonna reduce five percent of your of your selling

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$75 ,000 then well if the stock price of Tesla on the day

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that we sell it to you we're going to give you a 5 % discount.

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Well, we could, it's not fixed, it's not specific, but I just made up this example just to tell you, it doesn't have to be specific.

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We'll talk about that later on, but this is just a fictitious example.

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Also the contract will hide will have to identify rights to goods and services.

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Exactly what am I getting?

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What am I paying for it?

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What am I getting?

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Okay, I know what I'm paying for.

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I know how much I'm paying, but what am I getting in return?

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You have to identify what am I getting.

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Also, collectability.

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If you cannot collect the money from a contract, you're basically a charity.

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That's not really a true contract.

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Now, sometimes you may enter into a contract and collectability from that person is susceptible because they're really shaky, but you still want to make the sale because they might...

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pay you.

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Under those circumstances when collectability is susceptible, you're not really sure, but you want to take your chance, then you would use cash basis accounting.

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And what's cash basis accounting?

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You wait until you get paid, and this is where you really recognize the revenue.

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You would use cash basis not accrual basis not what we are learning here.

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Now, what should you do now?

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The best way to learn more about this is to go to my website, farhatlectures .com, and work MCQs,

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work true -false questions, look at exercises that's going to help you reinforce the concept.

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In the next session, we're going to be looking at step two in the contract, and that is after we have a contract,

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we have to know what are the obligation, the performance obligation in the contract,

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and we'll have a one session about performance determining the price, so on and so forth.

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Invest in yourself, invest in your career.

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Don't shortchange yourself.

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Go to Farhat, subscribe.

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try it for a month you like it you keep it

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if it's helping you if not you let it go good luck study hard and of course stay safe

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इस पाठ की शब्दावली और बोलने के सुझाव

इस वीडियो में शैडोइंग के लिए 172 वाक्य और 2035 शब्द हैं। बोला गया हिस्सा 11:24 लंबा है। वक्ता लगभग 179 शब्द प्रति मिनट की स्वाभाविक गति से बोलता है, जो रोज़मर्रा की बातचीत के करीब है। 86% शब्द अंग्रेज़ी के 3,000 सबसे आम शब्दों में से हैं; बाकी शब्द अभ्यास से पहले देख लेना अच्छा रहेगा।

इस वीडियो की मुख्य शब्दावली

वीडियो के 15 सीखने लायक शब्द, उच्चारण और अर्थ के साथ:

शब्द	उच्चारण	अर्थ
obligation संज्ञा	/ˌɑ.blɪˈɡeɪ.ʃn̩/	दायित्व
tesla संज्ञा	/ˈtɛslə/	टेस्ला
asset संज्ञा	/ˈæsɛt/	आस्ति
liability संज्ञा	/laɪəˈbɪlɪti/	उत्तरदायित्व, दायित्व
exit संज्ञा	/ˈɛɡzət/	प्रस्थान, निकासी
substance संज्ञा	/ˈsʌbstəns/	पदार्थ, वस्तु
investor संज्ञा	/ɪnˈvɛs.tə(ɹ)/	विनिधानकर्ता, निवेशक
customary विशेषण	/ˈkʌs.təˌmɛɹ.i/	प्रथागत, परंपरागत
charity संज्ञा	/ˈtʃæɹɪti/	दान
helpful विशेषण	/ˈhɛlp.fl̩/	मददगार
resource संज्ञा	/ɹɪˈzɔːs/	संसाधन
collect क्रिया	/ˈkɑlɪkt/	शामिल होने, इकट्ठा करना
fraud संज्ञा	/ˈfɹɔːd/	धोखा, छल
remind क्रिया	/ɹəˈmaɪnd/	याद दिलाना
discount संज्ञा	/ˈdɪskaʊnt/	छूट, बट्टा

वीडियो में आने वाली फ़्रेज़ल वर्ब

शब्द	अर्थ
pick up क्रिया	उठाना

ध्यान देने योग्य उच्चारण

वक्ता 40 बार संक्षिप्त रूपों का प्रयोग करता है, जैसे we're, don't, I'm। इन्हें वैसे ही छोटा बोलें जैसा आप सुनते हैं।

“sh” और “zh” की ध्वनियाँ: obligation /ˌɑ.blɪˈɡeɪ.ʃn̩/, recognition /ˌɹɛkəɡˈnɪʃ(ə)n/, transaction /tɹænˈzækʃən/, preparation /ˌpɹɛpəˈɹeɪʃ(ə)n/, partial /ˈpɑɹʃəl/
लंबे शब्द — बलाघात सही रखें: recognition /ˌɹɛkəɡˈnɪʃ(ə)n/, liability /laɪəˈbɪlɪti/, customary /ˈkʌs.təˌmɛɹ.i/, preparation /ˌpɹɛpəˈɹeɪʃ(ə)n/, recommendation /ˌɹɛkəmɛnˈdeɪʃən/

इस वीडियो से अभ्यास कैसे करें

पहले बिना बोले पूरा वीडियो एक बार सुनें और जो शब्द नहीं आते उन्हें लिख लें।
0.75× गति से शुरू करें, एक-एक वाक्य की शैडोइंग करें, और सहज लगने पर सामान्य गति पर लौटें।
अपनी आवाज़ रिकॉर्ड करें और मूल से तुलना करें, ख़ासकर obligation, tesla, asset जैसे शब्दों पर ध्यान दें।

शैडोइंग तकनीक क्या है?

शैडोइंग (Shadowing) एक विज्ञान-समर्थित भाषा सीखने की तकनीक है जो मूल रूप से पेशेवर दुभाषिया प्रशिक्षण के लिए विकसित की गई थी। विधि सरल लेकिन शक्तिशाली है: आप मूल अंग्रेज़ी ऑडियो सुनते हैं और तुरंत इसे ज़ोर से दोहराते हैं — जैसे वक्ता की छाया 1-2 सेकंड की देरी से। शोध से पता चलता है कि यह उच्चारण सटीकता, स्वर, लय, जुड़ी हुई ध्वनियाँ, सुनने की समझ और बोलने की प्रवाहशीलता में काफ़ी सुधार करता है।

शैडोइंग तकनीक: पूरी चरण-दर-चरण गाइड पढ़ें →

शैडोइंग अभ्यास: Revenue Recognition ASC 606. Step 1: Identify the Contract. - वीडियो के साथ अंग्रेजी बोलना सीखें

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इस वीडियो से अभ्यास कैसे करें

शैडोइंग तकनीक क्या है?