Financial Reporting and Analysis – ACG6175 Date: 5/18/09 Revenue Recognition Problems in the Communications Equipment Industry 1 – In late 2000‚ Lucent announced that revenues would be adjusted downwards by $679 million as a result of revenue recognition problems. Yet the firms market capitalization plummeted by $24.7 billion. Why do you think the market reacted so negatively to Lucent’s announcements of the problems? There is usually a grey zone between aggressive accounting‚ which
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Assessing Revenue Recognition Timing Explain when each of the following business should recognize revenues: a. A clothing retailer like The Limited. Revenue recognition: Sales basis method (at the time of sale). The revenue for a retail store like The Limited should recognize their revenue when the
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BIOVAIL CORPORATION • REVENUE RECOGNITION There are two possible FOB contract structures mentioned in the case‚ namely FOB shipping point and FOB destination. FOB shipping point means that Biovail would have recognized the revenue the same day it shipped as the sales arrangement was satisfied‚ service rendered‚ and a determinable sales price established. Conversely‚ FOB destination would not have allowed Biovail to recognize the revenue until the shipment reached the distributer. In such a
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A FEW CASE STUDIES SOLVED (Internal document of BusinessAnalytics.in) BusinessAnalytics.in #146‚ Ramaiah Street‚ 1st & 2nd Floor‚ Gopal Towers‚ Near Anjenaya Tech Park‚ Airport Road‚ Kodihalli‚ Bangalore - 560008 A Few Case Studies Solved Case study 1. Correlation and Regression Description of the Problem The owner of pizza corner‚ Bangalore would like to build a regression model consisting of six factors‚ to predict the sales of pizza. Data for past month sales and six different factors
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MEMO TO: Mr. David Maris DATE: September 9‚ 2010 SUBJECT: Biovail Concerns This report discusses the concerns regarding the Biovail pharmaceutical company and the causes‚ implication and ramifications of its recently released quarterly earnings guidance. Specifically‚ this report covers Biovail’s reasons for missing previous expectations for quarterly earnings and an analysis of the validity of these reasons. The focus will be on the assertion that a recent truck accident containing
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PPL Corporation v. Commissioner of Internal Revenue Business Income Tax‚ Northwestern Oklahoma State University ShaLyn Schaefer March 7‚ 2013 I chose this court case because the decision will have effects on many businesses in the United States who own foreign companies. A holding for the Commissioner of Internal Revenue may subject taxpayers in PPL’s position to double taxation. However‚ a holding for PPL threatens to undermine the consistency and uniformity of the U
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CASE 8-1: NORMAN CORPORATION 1. Answer: The transaction should be recognized based on the following points: i. ii. Conservatism concept stated that expenses should be recognized as soon as they are reasonably possible to occur. According to loss contingency‚ a liability is recognized when information available indicates that it is probable for a liability to occur and when the amount of loss can be reasonably estimated. Therefore‚ Norman should provide a provision for loss and recorded the transaction
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How SAB affects Wareham’s revenue recognition? Accordingly to SAB 101‚ all of the following conditions should be accomplished to recognize revenue. During our analyses‚ we have identified several missing conditions in current situation‚ accordingly to information provided. * Evidence of Order Arrangement: SAB 101 requires an evidence to identify any transaction as a formal sales order. During our analyses we have found that in the sales transactions tested by Soma Desai‚ only the Technology
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History Hong Leong Bank Berhad started its humble beginnings in 1905 in Kuching‚ Sarawak‚ Malaysia under the name of Kwong Lee Mortgage and Remittance Company and later in 1934‚ incorporated as Kwong Lee Bank Limited. In 1989‚ it was renamed MUI Bank‚ operating in 35 branches. In January 1994‚ the Group acquired MUI Bank through Hong Leong Credit Berhad (now known as Hong Leong Financial Group Berhad). This milestone saw the birth of Hong Leong Bank and in the same year in October‚ Hong Leong Bank
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eight country sales subsidiaries‚ each headed by a managing director. Within each of these areas sales engineers reported to their regional sales managers‚ who are responsible for reporting to the regional managing director. Product Analysis This case focuses on the sales for computer tomography (CT) scanners‚ developed in the 1960’s. CT scanners are medical devices that allow examination of cross sections of the human body through a display of images for diagnostic purposes. The end result of a
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