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Crowdfunding Helps Startups Raise Funds; JOBS Act Helps, SEC Must Do More Investor's Business Daily Episencial, a Los Angeles-based maker of baby-safe skin care products, turned to an unusual source when it needed $300,000 to expand its product offerings, marketing and distribution. Founder and CEO Kim Walls approached CircleUp, a San Francisco ... See all stories on this topic » | ||
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Uwingu Looks To Crowdfunding For The Future Of Space Exploration WebProNews For years, we've entrusted the future of space exploration to public agencies and they have done a great job. NASA was able to land on the moon, send a rover to Mars, and make a satellite out of Android phone with public dollars. Unfortunately ... See all stories on this topic » | ||
Crowdfunding startup, Picatic, can eliminate the financial risk for event ... Crowdsourcing.org Description Online ticketing startup, Picatic, brings the crowdfunding model to events thereby removing some of the financial risk for promoters, artists and venue-owners.The Canadian company, founded in 2008, is the brainchild of a former events ... See all stories on this topic » | ||
Hyper-Local Crowdfunding Site for Nonprofits Recently Launched Crowdsourcing.org Hyper-Local Crowdfunding Site for Nonprofits Recently Launched. Description The Money Crowd is a new local crowdfunding site that aims to help nonprofits and community organizations in the Tampa Bay area that need money for projects. The first group to ... See all stories on this topic » | ||
SMEs unaware of crowd funding Crowdsourcing.org Summary More than two-thirds of business owners have never heard of crowdfunding, according to research by the credit rating agency Experian. Description Just seven per cent said they would search the internet and only six per cent thought of talking ... 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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