CASES Real World Case 5-1 Requirement 1 A bill and hold strategy accelerates the recognition of revenue. In this case‚ sales that would normally have occurred in 1998 were recorded in 1997. Assuming a positive gross profit on these sales‚ earnings in 1997 is inflated. Requirement 2 A customer would probably not be expected to pay for goods purchased using this bill and hold strategy until the goods were actually received. Receivables would therefore increase. Requirement 3 Sales that would
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1. Is Eye Vision’s arrangement with Holland Hospital within the scope of ASC 985-605‚ Software: Revenue Recognition? In this case‚ the main content of the Eye Vision’s arrangement with Holland Hospital include embedded software medical equipment and an initial option to purchase a two-year separately priced maintenance agreement. In this case‚ because“Eye Vision has never sold‚ nor does it offer to sell‚ the Clear View Laser without the embedded software because the software is necessary to perform
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that have used these techniques? 5 popular techniques used by companies are: "big bath" restructuring charges‚ creative acquisition accounting‚ "cookie jar reserves‚" "immaterial" misapplications of accounting principles‚ and the premature recognition of revenue. “Big bath” technique: In that technique‚ companies attempt to overload one period with expenses therefore‚ the next accounting period shows an upgrading in earnings. Moreover‚ companies can set up an earnings reserve that can be used
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1. Compare and contrast the norm-based coding and absolute coding models of face recognition. Faces show a lot of information we can use to guide our social interactions - gender‚ ethnicity‚ age‚ and emotional state. Identification of faces requires sensitivity to subtle differences in very similar visual patterns. How do we search face space? Do they tile the space so an individual face can be represented by a peak in the distribution of neural responses (absolute) or do the use a code to represent
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time of sale‚ Essential should record as additional cost of goods sold‚ not as a reduction in revenue‚ because the free product does not represent a return‚ refund‚ or rebate of a portion of the sales price paid by the customer. Point and Loyalty Programs Customers can redeem specified quantities of points for awards such as free or discounted products. For this situation‚ Essential should not deferred revenue related to points awarded to customers. Part Two: Development cost Application Development
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Overlook Video Stores Inc. (OVS) To: Ms. Alice Hartford‚ Partner From: CA‚ Audit Senior Re: Planning for the year end 2009 of OVS and requested control deficiency information Engagement Overview The purpose of this memo is to document the planning of the financial statement audit st engagement of our client Overlook Video Stores Inc. (OVS) for the year ended December 31 ‚ 2009. OVS has been our client since its inception in 1998. This year’s audit will commence January‚ 2010‚ th
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company’s revenue. This paper explains the fraud occurred in recognizing the revenue and how it overstated the financial statements and increased the stock price. It also explains the fraud theory applied to the revenue recognition and the auditor’s failure in discovering the fraud and reports it to the SEC. This paper will provide methods that auditors should follow in auditing public companies and the best practices they should follow if the company changed the revenue recognition. Background
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In the United States‚ the Tax returns are filled and reported with Internal Revenue Service (IRS) or local tax collection agency like California Franchise Tax Board or with state. The reported documents carry the information used to calculate the all types of the taxes especially the income taxes. The tax returns are made by the IRS or any other applicable taxing authority. Due to the provisions of the Affordable Care Act in the United States there is intertwined complexity in the taxes and healthcare
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Harborside Health Center vs Internal Revenue Service Federal Tax Code section 208E states “No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any
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The transformation at the IRS gave useful insight to a real life overhaul of a system that was not meeting the needs of its consumers. The IRS has a very expansive group of customers‚ every person and group that does business‚ or has business transactions in the USA could be considered its customers. The size of the IRS’s customer base increases the need to avoid tenancies similar to what Mr. Kotter identifies in his article‚ “Leading Change: Why Transformation Efforts Fail.” Even though transitions
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