Identification: o The main issue is when to recognize the revenue with respect to the new subscriptions‚ keeping in mind the incentive of management to present the financial statements in the best possible light to facilitate the loan from the bank. o The bank is the user of the financial statements and will likely want statements prepared in accordance with GAAP or IFRS‚ as they are more reliable and relevant.
Premium Generally Accepted Accounting Principles International Financial Reporting Standards Management
recognize revenue over the ski season on an anticipated usage basis‚ in this case equally throughout the season. The fact that the $450 price is nonrefundable is not relevant to the revenue recognition decision. Revenue should be recognized as it is earned‚ in this case as the services are provided during the ski season. Requirement 2 November 6‚ 2013 Cash 450 Unearned revenue 450 To record the cash collection December 31‚ 2013 Unearned revenue ($450 x 1/5)
Premium Generally Accepted Accounting Principles Balance sheet Accounts receivable
its liberal revenue recognition policies. Currently this company recognizes revenue on product sales upon written acceptance of the product. However‚ acceptance typically occurs prior to the configuration of a particular system being finalized or payment being received from the customer. According to the Generally Accepted Accounting Principles (GAAP)‚ revenue should be recognized when a transaction occurs and 1) the revenue is realized or realizable and 2) the revenue is earned. Revenue is generally
Premium Generally Accepted Accounting Principles Revenue Income statement
References: Carlson‚ N. 2011. Inside Groupon: The truth about the world’s most controversial company. Business Insider (October 31) Financial Accounting Standards Board (FASB). 2012a. Revenue Recognition: Products—Recognition. Financial Accounting Standards Board (FASB). 2012b. Revenue Recognition: Principal Agent Considerations—Other Presentation Matters. ASC Section 605-45-45. Norwalk‚ CT: FASB. Groupon. 2011a. Form S-1: Registration Statement under the Securities Act of 1933. Filed with
Premium Revenue Income statement Generally Accepted Accounting Principles
especially technology". Recent researches have shown that in automatic lip-reading systems there is a chance to achieve up to 55 % error reduction‚ and the low recognition rate in the acoustic only system (43%) is raised to 75% by the incorporation of visual information. Modern Computer-based lip-reading usages: In addition to speech-recognition‚ speech impaired aid and increasing robustness in noisy places; modern Computer-based lip-reading technology are also used for security issues‚ and would
Premium Deaf culture Speech recognition Hearing impairment
recognize revenue at the point of sale based upon the time of shipment because the books are sold f.o.b. shipping point. Because of the return policy one might argue in favor of the cash collection basis. Because the returns can be estimated‚ one could argue for shipping point less estimated returns. (b) Based on the available information and lack of any information indicating that any of the criteria in FASB Statement No. 48 were not met‚ the correct treatment is to report revenue at the time
Premium Generally Accepted Accounting Principles Revenue Accounts receivable
systems can offer bank-vault security against losing your work. CD and DVD drives have become essential for many applications. Thus‚ the right choice of peripherals can make a big difference. Read the Real World Case 2 about the use of voice recognition technology in health care settings. We can learn a lot about the future of the human–computer interface and its business applications from this case. See Figure 3.13 . Peripherals is the generic name given to all input‚ output‚ and secondary
Premium Computer Personal computer Computer data storage
advantages management will no longer be able to decide that an outflow of assets is a loss and omit it from the determination of operating profit. 1.1. Changes in assets and liabilities Expenses are related to the value aspect of assets and liabilities. Revenues and expense come about because of events increase in the value of liabilities or decrease in the value of assets. We can say the expenses appears from the changes in asset if there is a transaction that decrease an asset or cause the outflow from
Premium Generally Accepted Accounting Principles Depreciation Revenue
record revenues of $250 as they are the merchants to the transaction and $200 (80% of transaction value) as their cost of goods sold. 2. Alternatively‚ the company can net off the effect and show $50 (20% of transaction value) as their commission revenue. 3. If I were the CFO‚ I would recommend to opt for the first method of revenue recognition because it would show better sales figures. But the second method would be in-line with the conservatism principle of revenue recognition as the
Premium Generally Accepted Accounting Principles Revenue
document imaging products‚ services and supplies in the United States and 130 other countries. In 2000‚ Xerox employed approximately 92‚500 people worldwide‚ 50‚000 of them in the United States. For the year ended December 31‚ 2000‚ Xerox reported total revenues of $18.7 billion and a net loss of $273 million. In order to see if fraud had occurred‚ a fraud examiner would have to gain an understanding of management and what factors motivate them. This area is just as important as understanding the financial
Premium Income statement Revenue Balance sheet