Revenue Recognition for Mcdonald's Corporation

REVENUE RECOGNITION MCDONALDS CORPORATION INTRODUCTION McDonalds and Burger queer have been in competition for over 50 years. Similar companies can take away diffe contain tax revenue course credit methods that can cause them to face different. This reports purpose is to explain McDonalds revenue recognition policies and methods in comparison to Burger Kings. DISCUSSION FOR accounting system POLICIES AND METHODS McDonalds and Burger Kings revenues mainly consist of both things, gross gross revenue and franchise fees. The sales they record are by confederation-operated restaurants. McDonalds records these sales employ a cash base of operations system. This system means that the accountants record revenues when the company receives cash, and it records expenses when it pays cash. By using a cash basis, McDonalds does not have to evaluate what it will not receive in its sales. McDonalds presents sales net of sales tax and other sales-related taxes (McDonalds one-year Report, 44). Franchise fees are for the services McDonalds brooks to the franchisees. Franchise fees include on the balance sheet are from the franchisees paying rent and a percentage of their sales. Currently this percentage is 4.0% of monthly sales (mcdonalds.com/corp).

The company recognizes continuing fees and royalties from the franchise fees in the period in which they are earned. McDonalds recognizes initial franchise fees when the franchise opens for business. The franchisee moldiness pay 25% cash as a stack payment and pay the rest within the next seven years. Because McDonalds does not show uncollectible accounts or offer information on it, it is difficult to determine how exposed the company is on collectibles. Burger King includes all of these items in its revenue recognition process. However, it separates franchise fees from franchise rent in a plane section called property revenues. It receives revenue from property income that it leases or subleases to franchisees. In addition, Burger Kings Annual Report states, Royalties paid... If you want to get a full essay, order it on our website: Orderessay

If you want to get a full essay, wisit our page: write my essay .