What is Eitf?
The Emerging Issues Task Force (EITF) is an organization formed by the Financial Accounting Standards Board (FASB) in 1984 to identify, discuss and resolve financial accounting issues with an aim to improve financial reporting.
How do I account for customer rebates?
Rebates paid for by the supplier are accounted for as a reduction of the cost of goods sold (COGS). For example, a car dealership sells a car that has a $200 factory rebate. The dealership isn’t reducing the price of the car. The customer is getting money from the manufacturer that made the product.
How many FASB interpretations are there?
Interpretations are a part of the U.S. Generally accepted accounting principles (US GAAP). 48 interpretations have been published as of September 2006. No. 1.
What is ASC 605 Revenue Recognition?
ASC 605 requires the following four criteria for revenue recognition: • Persuasive evidence of an arrangement exists. Delivery has occurred or services have been performed. The seller’s price to the buyer is fixed and determinable. Collectibility is reasonably assured.
WHO issued GAAP?
The specifications of GAAP, which is the standard adopted by the U.S. Securities and Exchange Commission (SEC), include definitions of concepts and principles, as well as industry-specific rules. The purpose of GAAP is to ensure that financial reporting is transparent and consistent from one organization to another.
How do vendor rebates work?
With a wholesale rebate program, you encourage your vendors and suppliers to purchase a desired amount of your product in exchange for a financial reward. Once your vendor has made the purchase, they are incentivized to focus effort on your product, rather than a competing option without a rebate.
What is the point of ASC 606?
The purpose of ASC 606 is to eliminate discrepancies in how businesses handle accounting in the case of similar transactions across various industries.