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Recognition of revenue

I just want to find out, what is the reasonable time for processing revenue transaction. For example the Municipality has identified the illegal connection for water and they have quantified the amount of the illegally used water and they intend to charge that against the customer. The memorandum instructing that the finance charges can be process is approved, however a period of more than 30 days has passed since approval and the charge has not yet been processed.


Cynthia (Helfert) de Hoog
Title: Assistant Financial Controller
Company: Microlease
(Assistant Financial Controller, Microlease) |

Collectivity of the debt is also a consideration for revenue recognition. Given the illegality of the access/delivery, recognizing revenue should be limited to only the amount estimated collectible. You may need to wait to recognize it upon payment.

Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

To quickly answer your question.....the time frame is immediately "upon approval". The sooner you recognize it, the sooner one can collect or file legal actions.

I disagree with Cynthia ("recognizing revenue should be limited to only the amount estimated collectible"). GAAP aside, you have to recognize the claim (recognizing revenue) in order to be able to collect and go after the illegal connection and use. The other option is recognizing it as PILFERAGE and commencing collections or legal actions from that context.


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