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Crowdfunding: an introduction UK Fundraising Crowdfunding is an empowering alternative to grant applications. Crowd funding can be for a variety of purposes - getting a project off the ground; refurbishing a building; financing a film or exhibition or funding a startup company or small business ... See all stories on this topic » | ||
The First Kickstarter Satellites Science 2.0 We are in a new space revolution, and in the past two years, several people have used the Kickstarter crowd-funding platform to try to get into space. Not all succeeded. Let's look at the current standings. They are, in order of kickstarter: Team ... See all stories on this topic » | ||
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Crowdfund a Homestuck video game, gruesome dog costumes, and Golden Age ... io9 Crowdfund a Homestuck video game, gruesome dog costumes, and Golden Age baked goods Kickstarter has been on fire this week thanks to a single word: Homestuck. The uber-popular webcomic has a video game in the works, and you can help get it off ... 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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