as generally accepted accounting principles‚ or GAAP‚ for public and private companies. Rather‚ Apple is choosing to make customers pay so that it receives a particular accounting treatment it considers most favorable to it‚ they say. "GAAP doesn’t require you to charge squat‚" says Lynn Turner‚ managing director of research at Glass Lewis &Co. and a former chief accountant of the Securities and Exchange Commission. "You charge whatever you want. GAAP doesn’t even remotely address whether or not you
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Accounting and GAAP recognition of revenue under SAB 101 and SAB 104 for supermarket customer loyalty cards and points issued on airlines frequent flyer programs. Customer loyalty programs and rewards programs are structured marketing efforts that reward customers who are loyal and regularly buy products and services from the same company. Customer loyalty programs and rewards programs are used to incentivize customers‚ build customers’ allegiance to the company’s brand and increase sales of the
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GAAP / IFRS Fiat Group’s first-time adoption of IFRS Differences Between Key Accounting Methods Under Italian GAAP And IFRS What characterizes the differences between the two sets of methods? - Substance over form Example: Recognition of revenue - Less flexibility Example: Recognition of R&D cost - More transparent Main factors that affect management’s reporting incentives and strategy in fiscal year 2005 - Research & Development: Because Fiat main operations are based on the manufacturing
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matching as deferred costs are now expensed when incurred. It also better reflects the costs of employees as stock option compensation is now expensed. Question 2: Summarize the differences between Fiat’s key accounting methods under Italian GAAP and those under IFRS. What characterizes the differences between two sets of methods? From the perspective of
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values Influenced by GAAP choices Backward looking Financial Ratios Strengths ◦ Adjusts for size differences (relative measure) ◦ Provides comparative measures of efficiency and growth Weaknesses ◦ Based on book‚ not market values ◦ Influenced by GAAP choices ◦ Iidentification of “norm” is problematic EPS and P/E Ratios Strengths ◦ Widely used and recognized ◦ Linked to market price of stock Weaknesses ◦ ◦ ◦ ◦ EPS influenced by GAAP choices EPS not
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The alternative method would be to record it under the net method where $50 is recorded (20% of $250) is recorded as commission revenue. 3. I would recommend the company use the net method because that would be in better accordance with SAB 101 or GAAP. It would appropriately record the amount of revenue corresponding to their function as an agent. In addition if we opted for the gross method‚ in event of a restatement requested by the SEC‚ the company could suffer from a decline in market price
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I.Issues Why does net income not equal cash flows? Why do we need accrual accounting? (Why do not we fire all accountants and just publish summary bank statements) Why do the differences between owners’‚ players’‚ GAAP and truth number exist?(Can accounting numbers be neutral representations of what happened? What happens if a retired non-roster player (e.g. Joe Portocararo) returns to the active roster while continuing to earn the same money promised him in his guaranteed contract? Of what
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income under Country A GAAP. SKD amortizes goodwill over a longer period (20 years) than is allowed in Country B (5 years)‚ so an additional amount of goodwill amortization expense must be recognized to determine income under Country B GAAP‚ which reduces Country B GAAP income. b. The goodwill adjustment affects the retained earnings in stockholders’ equity. The increase in Country A GAAP income results in an increase in retained earnings and the decrease in Country B GAAP income results in a decrease
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Principles (GAAP). According to GAAP‚ the recording of land value or any asset belonging to a company is to be reported based on the historical cost principle‚ which is the actual cost paid for the land and not fair market value (U. S. GAAP‚ n.d.). Jason P. Browning (2011)‚ an eHow contributor states that an asset can never be restated in a way that reflects appreciation in value (an increase in value due to inflation‚ supply and demand‚ improvements‚ etc.). When it comes to bad debt‚ GAAP has stipulated
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accrual accounting in reflecting timing differences between cash receipts and product/service delivery‚ especially in situations where there are multiple deliverables. The case also enables students to reflect on (a) the use of supplementary non-GAAP disclosures‚ (b) the impact of accounting on firm value and (c) the role of companies in the standard setting process. Reading assignment: Pages 260 – 265 of the text Class notes handout. Assignment questions: 1. Complete the Oracle example
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