Question

In case where installation fees are other than incidental to the sale of a product, they should be recognized as revenue _____________________.

• A. When the order for installation of equipment is received
• B. When the advance for installation work to be done is received
• C. When the equipment is installed and accepted by the customer
• D. All of the above

Answer 1

The correct option is C When the equipment is installed and accepted by the customer

In cases where installation fees are other than incidental to the sale of a product, they should be recognised as revenue only when the equipment is installed and accepted by the customer. Revenue should be recognised when the service is completed.