Installment Sales Method

Knowledge Center



Summary, forum, best practices, expert tips and information sources.

 

Installment Sales Method

What is the Installment Sales Method? Meaning.

The Installment Sales Method is one of several Revenue Recognition approaches under U.S. GAAP, in which revenue is recognized subsequently to the sale, at the time of cash collection.


One instance in which revenue recognition might be delayed beyond the point of sale is when sales are made under very extended payment terms (e.g. installment sales of consumer durables and retail land sales of vacation or retirement property).


As a lengthy collection period significantly increases the risk of non-collection and in general does not provide a reasonable basis for estimating the proportion of installment accounts likely to prove uncollectible, neither of the two revenue recognition conditions under U.S. GAAP are satisfied and the recognition of revenue should be deferred.


The Installment Sales Method recognizes income based on the Gross Profit Percentage (gross profit/sales) and the amount of cash collected. For example, if a company collected 35% of the total sales amount, it can recognize 35% of the gross profit. The remaining 65% of gross profit are deferred until cash is collected.


Special Interest Group

Installment Sales Method Special Interest Group.



Special Interest Group (3 members)

Forum  

Forum about the Installment Sales Method.


Best Practices

The top-rated discussion topics about the Installment Sales Method. Here you will find the most valuable ideas and practical suggestions.


Expert Tips

Advanced insights about the Installment Sales Method. Here you will find professional advices by experts.


Information Sources

Various sources of information regarding the Installment Sales Method. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.


Special Interest Group Leader

Are you an expert in the Installment Sales Method? Sign up for free

Link to this knowledge center

Copy this code to your web site:

 
 

Return to Management Hub: Finance & Investing


More on Management  |  Return to Management Dictionary  | 

 

This ends our Installment Sales Method summary and forum.



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2020 12manage - The Executive Fast Track. V15.6 - Last updated: 30-11-2020. All names of their owners.