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Will Renewable Energy Be the Focus of Crowdfunding Social Entrepreneurs? Ecopreneurist With the advent of Crowdfund Investing (aka equity or debt-based crowdfunding) will we now see technology merge with social entrepreneurship to solve some of the world's leading societal problems? Businesses measure performance in profit and returns. See all stories on this topic » | ||
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Broken Sword 5: An Adventure in Crowd-funding announced Adventure Gamers At last! The long-rumoured, oft-teased announcement of a new Broken Sword adventure is finally official, though still not fully guaranteed, as Revolution has launched a Kickstarter campaign to fund development of The Serpent's Curse. The fifth ... See all stories on this topic » | ||
State warns of investment scams Leader-Telegram The state Department of Financial Institutions put crowdfunding, a sort of panhandling on the Internet, at the top of its annual list of the top 10 ways you can be separated from your investment. Crowdfunding doesn't yet legally exist as an investment ... See all stories on this topic » | ||
In 'Crowdfunding,' Money Trail is Murky California Report Recent successes in raising money on the Internet are making "crowdfunding" look like a real alternative to the old ways of getting startup money. On the popular crowdfunding site Kickstarter, entrepreneurs are now promising products not even made yet ... See all stories on this topic » |
A start-up using crowd funding to create a product is different from a normal company. The start-up has cash inflows from donations but does not have a product, yet. In this situation, we recommend using completed-contract method to recognize revenue. Under this way of thinking, we assume the start-up is akin to a project or a long-term contract. The crowdfunding company will find it difficult to estimate the revenue from crowdfunders and, hence, the cost of rewards or perks. Under International Financial Reporting Standards (IFRS) and GAAP guidelines, if the firm cannot reliably measure the outcome of the project, revenue should be recognized based on contract costs. These costs should be expensed when incurred. Profit is recognized only at the completion of the project. In summary, for crowdfunding companies, revenue, expense, and profit are recognized only when the crowdfunded product is actually manufactured. 1 For example, assume that AAA Corp. wants to manufacture bicyc...
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