Posted: October 20th, 2016

Discuss the reasons why you believe that revenue recognition is treated differently under these two different scenarios with in the airline industry

The Case of the Airline Industry­ When to Recognize Revenue Consider the earnings process applying to a travel agent and an airline company and then defend the criteria for recognizing revenue in each of the two cases. A travel agent helps a customer purchase an airline ticket and recognizes revenue for its commission at the point the customer purchases the ticket. Some argue that revenue recognition is appropriate because the earnings process of the travel agentâhelping the customer make travel plans and arrangementsâis largely completed once the customer purchases the ticket. What do you think? In contrast, an airline that provides the same upfront service with its own in­house sales force cannot recognize revenue for these services because the airlineâs earnings process is incomplete until the flight itself is provided. Required: After studying this week on income concepts, discuss the factors to be considered in determining when revenue should be recognized in measuring the income of a business enterprise. Discuss the reasons why you believe that revenue recognition is treated differently under these two different scenarios with in the airline industry. Your well­written paper must be 2 pages, in addition to title and reference pages. The paper should be formatted according to the APA Requirements. Cite at least two peer­reviewed sources, in addition to the required reading for the module