In many small and even medium-sized companies, financial reporting during the year does not include all of the adjustments made at the year-end (often in connection with the audit or review of the annual financial statements by an independent professional accountant).
“Revenue recognition” refers to when sales and other revenues are recorded. Recognizing revenue is fundamental to accounting. In theory, you recognize revenue when you earn it. It sounds like it should be simple, but it isn’t.
The financial reporting standards that must be used by not-for-profit organizations are determined in Canada by the Accounting Standards Board and the Public Sector Accounting Board. New rules for accounting standards for not-for-profit organizations are effective January 1, 2012.