On January 1, 2023, Caramel Company enters into a contract with Keystone Inc. to perform asset management servcies for one year. Caramel Company receives a quarterly management fee of 2% of Keystone's assets under management at the end of each quarter. Caramel Company also receives a performance-based incentive fee of 10% of the fund's return in excess of the return of an observable index at the end of the year. When should Caramel Company recognize the revenue from the management fee and the performance based incentive fee?
On January 1, 2023, Caramel Company enters into a contract with Keystone Inc. to perform asset management servcies for one year. Caramel Company receives a quarterly management fee of 2% of Keystone's assets under management at the end of each quarter. Caramel Company also receives a performance-based incentive fee of 10% of the fund's return in excess of the return of an observable index at the end of the year. When should Caramel Company recognize the revenue from the management fee and the performance based incentive fee?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2023, Caramel Company enters into a contract with Keystone Inc. to perform asset management servcies for one year. Caramel Company receives a quarterly management fee of 2% of Keystone's assets under management at the end of each quarter. Caramel Company also receives a performance-based incentive fee of 10% of the fund's return in excess of the return of an observable index at the end of the year. When should Caramel Company recognize the revenue from the management fee and the performance based incentive fee?
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