Quiz – Revenue Recognition

Review the following information extracted from the accounts of Company A.

  1. What key features do you notice upon reviewing the information that might concern you?
  2. What financial ratios or other indicators support this?
  3. What could be the cause?
MYR MillionQ4 2021Q3 2021Q2 2021Q1 2021Q4 2020Q3 2020Q2 2020
Current billed receivables (1)50.657.161.266.458.142.544.7
Accrued (unbilled) receivables (2)41.939.
Long-term instalment receivables (3)26.913.
Total Receivables119.4109.2110.5101.293.178.769.8
Net Income10.98.3
Cash flow from operations (4)1.49.4


  1. Represents the value of current invoices receivable for work billed to customers.
  2. Represent the value of work carried out during the production period when systems are being developed prior to delivery to clients.
  3. Represents amounts due from customers more than 12 months from the balance sheet date. These contracts are typically for up to 5 years duration.
  4. Income and CFO information which is presented for 2 quarters only is to show the direction of travel in relation to net income and cash flow from operations.

Here is the answer of this quiz.

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