The birth of the Internet in the 1990s led to the creation of a new...
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The birth of the Internet in the s led to the creation of a new industry of online retailers such as Amazon, Overstock.com, and Insight Enterprises, Inc. Many of these companies often act as intermediaries between the manufacturer and the customer without ever taking possession of the merchandise sold. Revenue recognition for this type of transaction is challenging because it depends on whether a seller is classified for a particular transaction as a principal or an agent. Principle provides a "gross" presentation that includes revenue, cost of goods sold and profit. Agents provide a "net: presentation that includes as commission revenue only the difference between revenue and cost of goods sold. Access the FASB accounting standards codification at the FASB website
The birth of the Internet in the s led to the creation of a new industry of online retailers such as Amazon, Overstock.com, and Insight Enterprises, Inc. Many of these companies often act as intermediaries between the manufacturer and the customer without ever taking possession of the merchandise sold. Revenue recognition for this type of transaction is challenging because it depends on whether a seller is classified for a particular transaction as a principal or an agent. Principle provides a "gross" presentation that includes revenue, cost of goods sold and profit. Agents provide a "net: presentation that includes as commission revenue only the difference between revenue and cost of goods sold.
Access the FASB accounting standards codification at the FASB website
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