Revenue Recognition Policy

This sample policy is designed to help organizations recognize revenue on sales transactions in a timely manner.  

In this sample, a company operating unit enters into written sales agreements with customers as its standard business practice with certain customers or for certain products. When a written sales agreement is the unit’s standard practice for a particular type of transaction, revenue cannot be recorded on that type of sales transaction until the risks and rewards of ownership have passed to the customer and the written sales contract has been executed. The company's policy requires that revenue be earned before it is recognized.