Research On Revenue Recognition Of E-commerce

With the development of e-commerce, there is a new way to trade that trading online compared with the original tradition. As the scale of e-commerce increasing, the proportion of e-commerce in China’s economic life becomes more important than before. As we all know, the pursuit for profit is an important business’ goal. Revenue as the main source of profit has attracted much more attention. In order to ensure the authenticity and reliability of the financial statements that the enterprise information provided, How to regulate the revenue recognition and measurement is an important issue. Therefore the role of income guidelines which reflect the actual economic activity is particularly prominent.E-commerce enterprise is based on the internet so that its transaction object and method of payment are different from the traditional economic activities, especially sales of digital goods. When there has the third-party which as a payer, revenue recognition will have many problems which are different from the traditional business. In the study of e-commerce environment, this paper analyzes sale’s activities and revenue recognition criteria. We discover that there are many problems about recognition principle, confirm point, type of revenue and measurement of revenue.By studying the new revenue guidelines namely IFRS15 which include a new revenue recognition framework, we can have a better understanding about the revenue recognition conditions, revenue recognition point, the amount of revenue. IFRS15 is focused on control as the sole criterion for revenue recognition; we should use the completion of performance obligations to identify the point of revenue recognition.In recognizing the amount of revenue, we should allocate the transaction price into performance obligations, and determine the amount of revenue.In the policy recommendations, we propose that revenue recognition should always adhere to the accrual basis. We should not recognize the revenue in advance. At the same time, we also should not deferred revenue for the unconditional sales. Secondly, we propose that we should make the transfer of the control as revenue recognition criteria. Finally, revenue recognition should be based on the completion of obligations in a certain point or a certain period. In the case of the above-mentioned principles of income, this article from two angles that a certain point of time and over a period of time make specific revenue recognition criteria, which reflects control and compliance obligations. Also this article makes clear explanation for transaction types of e-commerce.The innovation of this paper is that it combines with new international revenue guidelines namely IFRS15 to solve revenue recognition problems. In the conclusion, we highly stress the control and performance obligations. It is recommended that transfer of control should apply to revenue recognition. We should use completing progress of performance obligations and the transaction price allocated to performance obligations to measure the amount of revenue and timing of revenue.