...2015 Professor: Greg Trompeter Office: 323 BA I Phone: 407.823.2150 Office hours: Tuesday before class; as announced in class; and by appointment. Required texts: Readings available as noted below. • Trueblood cases from Deloitte. Available at: http://www.deloitte.com/view/en_US/us/About/university-relations/Deloitte-Foundation/0ac1264f0b0fb110VgnVCM100000ba42f00aRCRD.htm • FASB codification—password to be handed out in class. You may log in at http://aaahq.org/ascLogin.cfm Objectives This course examines: • How accounting principles are established and monitored by standard setters. • The strengths and weaknesses of various accounting methods and how applications of such methods affect decisions of users and preparers of financial statements. • Current issues facing standard setters and the profession. Grades will be determined as follows: 1. Class participation 45 possible points 2. Financial reporting timeline 5 possible points 3. Mini-cases (Trueblood, FASB, HBS or similar) 35 possible points 4. Problem sets and discussion question write-ups 30 possible points 5. Group presentation 10 possible points 6. Research paper 20 possible points 7. Final exam 5 possible points 150 possible points NOTE: I assume that you should plan to invest—at a minimum—three hours of time outside of class for...
Words: 8209 - Pages: 33
...TrueBlood Case 04-4 - Inventory The FASB Codification provides guidance on how developing animals and animals available and held for sale are to be valued. Section 905-330-35-2 states that developing animals are to be valued at the lower of cost or market. Section 05-330-32-3 states that animals available and held for sale are to be valued: a. The lower of cost or market b. At sales price less estimated costs of disposal, if all the following conditions exist: 1. The product has a reliable, readily determinable, and realizable market price. 2. The product has relatively insignificant and predictable costs of disposal. 3. The product is available for immediate delivery. In the case of Three Little Pigs, Inc. it is clear that inventory is valued at the lower of cost or market. Section 330-10-35-1 provides the conditions under which inventory should be evaluated for impairment: A departure from the cost basis of pricing the inventory is required when the utility of the goods is no longer as great as their cost. Where there is evidence that the utility of goods, in their disposal in the ordinary course of business, will be less than cost, whether due to physical deterioration, obsolescence, changes in price levels, or other causes, the difference shall be recognized as a loss of the current period. This is generally accomplished by stating such goods at a lower level commonly designated as market. In this case, the company has recognized that...
Words: 668 - Pages: 3
...The issue in Trueblood Case 09-2 is how to account for the funding that Pharmagen pharmaceutical company will receive from Company XYZ for research and development into a new drug, X. They also have to account for the royalty payments that Pharmagen will owe Company XYZ in the future. Pharmagen pharmaceutical company is working on developing a new drug, X. They have been self-funding the research and development costs. They entered into a Funding Agreement with Company XYZ, a private equity investor, who has agreed to provide Pharmagen with up to $500 million of the total cost needed to develop drug X over the estimated 3 year project time frame. Pharmagen is not obligated to successfully complete the drug and there are no performance obligations related to its development. The money received from XYZ is nonrefundable. However, the money provided by XYZ can only be used towards drug X. If Pharmagen successfully completed the drug and it is approved for public sale, XYZ will receive future royalty payments from both drug X and an existing drug that is already available for public sale. Pharmagen also retains the rights to drug X. Pharmagen should report their cash from XYZ Corporation as deferred income based on ASC 470-10-25-1 (Sales of Future Revenues). It states that when “an entity receives cash from an investor and agrees to pay the investor,” in this case a royalty of future sales, “it is assumed that immediate income recognition is not appropriate due to the facts and...
Words: 658 - Pages: 3
...Centers Email Subscriptions Careers About Press Events Alumni Clients Contact Global > United States > About > University Relations > Deloitte Foundation Global site selector Go Search Search Top searches Top searchesBookmark Email Print this page Increase font Alliances Catalyst for Innovation Community Involvement Corporate Responsibility Deloitte’s sponsorship of the U.S. Olympic Committee Inclusion Deloitte University Ethics & Independence Deloitte Life Growth Through Acquisition History Investor Confidence Leadership University Relations Deloitte Foundation Faculty Resources Faculty and Ph.D. Support Life, Inc. Student Events The Trueblood Case Studies DOWNLOAD For a complete index of Cases and Addendum summary please click the download button above. The Trueblood Series cases and solutions are available in Adobe PDF format below. Solutions are password protected for faculty use only. Access to solutions by other unauthorized individuals is strictly prohibited. To find out how to obtain access to the case solutions, please contact us via e-mail or mail a request on your school letterhead to: Deloitte Foundation Ten Westport Road Wilton, CT 06897 Due to the...
Words: 2280 - Pages: 10
...XXXXXXX BONER TITS REST OF PAPER IS LEGIT Deloitte Trueblood Case 09-2 The case of “Pharmagen Pharmaceutical Development Funding” deals with a private equity investor who gives $500 million to Pharmagen Pharmaceutical for research and development of a new drug “X”. The issue at hand in this case is how the treatments of the R&D funding received and the subsequent royalty payments should be accounted for. The facts of this case are: * Pharmagen and the non-related PEI enter into a funding agreement where PEI will contribute $500 million for the R&D of a new drug being developed by Pharmagen. * The funding is restricted to the development of drug X and Pharmagen is not required to complete the drug. * If at any time the project is scrapped the amount received by Pharmagen is non-refundable. * After completion of drug X the PEI will receive future royalties based on the sales of the new product, and they will also receive royalties on an existing Pharmagen drug for a defined period of time. * Pharmagen will retain all intellectual property rights and there are no other agreements between the two parties. Based on this fact pattern I would argue that treatment related to ASC 730-20 is applicable. With regard to this accounting standard for research and development, the issue now lies with whether the funding is a liability to repay the PEI or an obligation to perform contractual services. In order to prove that a liability does not...
Words: 1117 - Pages: 5
...ACCOUNTING THEORY (FAR 600) Teaching and Learning Arrangements (SEMESTER: SEPT 2013 – JAN. 2014) COURSE CODE : FAR 600 PROGRAM : BACHELOR OF ACCOUNTING (HONS) CREDIT HOURS : 3 CONTACT HOURS : 3 STATUS : CORE TEACHING LECTURER : Prof Dr Rohana Othman OFFICE & PHONE NO. : Room 419 (Off. Tel: 03-55444987) E-MAIL : rohana799@gmail.com SYNOPSIS This course is designed to further enhance the students’ understanding of the concepts and issues in accounting theory and practices. The course involves the study of the practical and theoretical issues involved in the development, implementation and changes in conceptual framework and regulatory framework. COURSE OUTCOME At the end of the course, students should be able to: 1. Discuss the various theories and paradigms in accounting. 2. Demonstrate an understanding on the concept of Islamic Accounting, the need for it and its differences to conventional accounting. 3. Evaluate the evolution of the conceptual framework and standard setting process, nationally and internationally. 4. Evaluate the relationship between accounting theories and framework to the practice in the real world. 5. Analyze the recognition, measurement and other current issues in financial reporting. COURSE OUTLINE |Week |Topic |Contact Hours |Learning...
Words: 1500 - Pages: 6
...July 25, 1999 Chapter 2: Normative Accounting Theory The purpose of this chapter is to identify those characteristics of accounting information that are thought to make one system of accounting better than another. Since the material is based on eighty years of accounting research, by countless researchers, it is clearly neither possible nor desirable to review all the arguments, or even the main arguments, used by advocates of all the different competing accounting systems. For instance, it would be difficult to improve on Henderson and Peirson's [1983] 268-page thorough, balanced, well-documented portrayal of the evolutionary development of accounting thought from the "pre-theory period" (1494-1800), through the "general scientific theory period" (1800-1955), and the "general normative theory period" (1956-1970), to the "scientific theory period" (post-1970). The approach adopted for this chapter is therefore to aim for a concise summary of the products of normative accounting theory. The objective is to search for common ground wherever possible, without ignoring important differences. What is reported is intended to cover most of what is said to be "good", "useful", or "desirable" about accounting information. The four-step structure of this chapter is depicted in Figure 2.1 (next page). To begin with, a search of the literature identifies three main Objectives of Accounting. This list of objectives, which is presented and discussed in Section 2.1, is intended...
Words: 12883 - Pages: 52
...Trueblood case 09-2: Pharmagen Pharmagen case describes a $500 million Research and Development (“R&D”) funding agreement between pharmaceutical company (“Pharma”) and third-party private investor (“PEI”). The issue is to decide on how to account for funding of the R&D and royalty payments, and identify authoritative literature applicable to the agreement. Case states the following facts about agreement: • Pharma will receive up to $500 million from PEI for R&D cost for new drug X • A non-refundable funding to be used solely for drug X development costs • PEI will provide incremental funding as long as Pharma is demonstrating progress, however Pharma is not obligated to successfully complete development, “best effort”arrangement • Pharma estimated completion of project will take 3 years (from agreement date), and will cost estimated $1 billion • Pharma retains all intellectual property rights to drug X • PEI is entitled to receive future royalties on drug X revenues • PEI is entitled to receive future royalties associated with an existing commercialized drug Facts presented in the case call for Accounting Standards Codification (ASC) section 730-20 to be applicable. This accounting standard provides clarification and guidance to entities that entered into R&D arrangements, and advises on proper recognition. To define how transactions in Pharma and PEI agreement should be recorded, we should take a close look...
Words: 1356 - Pages: 6
...INTERMEDIATE (FINANCIAL) ACCOUNTING I SUBCLASS KLM CASE ANALYSIS QUESTIONS CASE 1 – REVENUE RECOGNITION AND EARNINGS MANAGEMENT INTERMEDIATE (FINANCIAL) ACCOUNTING I SUBCLASS KLM CASE ANALYSIS QUESTIONS CASE 2 – REVENUE RECOGNITION FOR A CONSTRUCTION PROJECT HKU Technology Inc. (Hereafter, HKU Tech) is a large construction contracting firm that serves a variety of industrial customers that purchase machinery and equipment from HKU Tech. HKU Tech’s business primarily involves the design and manufacture of large, industrial machinery and tooling that is used by its customers in manufacturing parts and components for fighter jets, transport planes, and other aerospace-related machinery and equipment. All of HKU Tech’s construction contracts involve the design, development, and manufacture of machines that are unique and customized to the specifications of its customers. HKU Tech negotiates all its contracts with its customers on either a fixed-price or cost-plus basis. HKU Tech has developed an accounting policy to recognize revenue related to its customized construction contracts, which is outlined as follows: The Company performs under a variety of contracts, some of which provide for reimbursement of cost plus fees, and others that are fixed-price-type contracts. Revenues and fees on these contracts are primarily recognized on a contract-by-contract basis using the percentage-ofcompletion method of accounting, which is most often based on contract costs incurred to date compared...
Words: 1474 - Pages: 6
...Chapter 10 Operational Assets: Acquisition and Disposition Questions for Review of Key Topics Question 10-1 The term operational asset is used to describe the broad category of long-lived assets that are used in the production of goods and services. The difference between tangible and intangible assets is that intangible assets lack physical substance and they primarily refer to the ownership of rights. Question 10-2 The cost of an operational asset includes the purchase price (less any discounts received from the seller), transportation costs paid by the buyer to transport the asset to the location in which it will be used, expenditures for installation, testing, legal fees to establish title, and any other costs of bringing the asset to its condition and location for use. Question 10-3 The cost of a developed natural resource includes the acquisition costs for the use of land, the exploration and development costs incurred before production begins, and the restoration costs incurred during or at the end of extraction. Question 10-4 Purchased intangibles are valued at their original cost to include the purchase price and all other necessary costs to bring the asset to condition and location for use. Research and development costs incurred to internally develop an intangible asset are expensed in the period incurred. Filing and legal costs for both purchased and developed intangibles are capitalized. Question 10-5 ...
Words: 8052 - Pages: 33
...……………………………………………………………..……………………………...5 References……………………………………………………………………….………………..8 Abstract Reggie McNeal leads the reader to think that perhaps spiritual leaders are looking for greatness in all the wrong places. He also seem to hint that some spiritual leaders do not hope to achieve greatness, because they are not using their God given gifts and talents in ministry. McNeal uses the following words as the heading for his introduction, “NEEDED: GREAT SPIRITUAL LEADERS.” From the introduction one might assume that McNeal feels that great spiritual leaders are few and far in-between in the age in which we currently live. McNeal also quotes opening words spoken in a chapel service by Elton Trueblood which were, “Deliberate mediocrity is a sin.” McNeal seemingly feels that far too many churches and spiritual leader operate at such a low level that they are unable to motivate, inspire, or excite others. Unfortunately, some spiritual leaders believe that to desire greatness makes them anything but humble. Because their perception of spiritual greatness is warped, they lead mediocre lives, fail to develop desire or drive for greatness, and they can be the reason other people fail to have hope for a positive, meaningful, and spiritually productive future. McNeal said, “Spiritual leaders self-elect into greatness by practicing seven...
Words: 1962 - Pages: 8
...Deloitte Trueblood Case: 11-7 Due (5/28/13) Allfoods Corporation Team Members: Heidi Fosse (FosseH@cwu.edu) Josh Minert (MinertJ@cwu.edu) Brianna Brown (BrownB@cwu.edu) Summary: * Calendar year-end company * February 1, 2009 – Allfoods announced acquiring 80% of outstanding common stock of Baked Beans Corp. (Baked Beans) in business combination * August 1, 2009 (acquisition date) – Allfoods paid $40M cash and issued 2 million shares of Allfoods common stock to selling shareholders of Baked Beans * All outstanding stock options granted to Baked Beans employees will be replaced with Allfoods stock options Determining Consideration Transferred: * August 1, 2009 – Allfoods acquired Baked Beans * Allfoods share price was $30 on announcement date * Allfoods share price was $35 on acquisition date * Allfoods would issue the selling shareholders an additional 1 million shares if Baked Beans revenues for 12-month period after acquisition were at least $150 M * Fair value of contingent consideration - $20 M as of acquisition date * Value of replacement stock option awards attributable to precombination services is $5M and postcombination services is $7M * Allfoods incurred $4M of acquisition related costs Fair Value of Assets Acquired and Liabilities Assumed: * Baked Beans owns manufacturing facility in CA comprised of: * Land and two buildings – could be rezoned into residential subdivision; management determined the...
Words: 4426 - Pages: 18
...ACTG 493, Accounting Cases, Research and Analysis Group Case 1 Memorandum To: Professor Siyi Li From: Group 4 Date: July 5, 2016 Subject: eVade Pays Up (Deloitte Trueblood Case 14-07) I. Case Description and Key Facts eVade is an online retailer that fulfills its orders by shipping its products directly to customers across all 50 states in the U.S. eVade does not have a brick-and-mortar store presence in any state, but does operate distribution centers in various states, including State X. eVade does not collect or remit sales tax to State X. This practice is consistent with eVade’s practice in all 50 States. In recent court rulings, State X has taken the position that operating a distribution center within the state constitutes nexus and thus would subject any company operating a distribution center to collect and remit sales tax on all sales made within the state. As of December 31, 2011, eVade has operated a distribution center within State X for the past five years. Although the company considers the risk of detection to not be probable, eVade estimates total sales tax payable to State X to be $50 million. In addition, eVade estimates that $6 million in interest and $4 million in penalties are also payable to the state. On March 15, 2012, a tax amnesty program was established by the Governor of State X. The program provides that an unregistered taxpayer who voluntarily registers to collect sales tax prospectively will be forgiven...
Words: 4930 - Pages: 20
...BSC (HONS) PUBLIC HEALTH OMED 1204 MO1 EMPLOYMENT BASED LEARNING COURSE DEADLINE: 09:05: 2013 WORD COUNT: 2047 The developed world talks of a demographic time bomb in the 21st century as the proportion of people aged over 65 in the UK rose from 15% to 17% from 1985-2010, an increase of 1.7m people, and is projected to reach 23% by 2035, according to the office of national statistics (ONS 2012). Of most significance for the social care system is the growth in the number of people aged over 85, which doubled from 690,000 in 1985 to 1.4m in 2010 and is set to reach 3.6m, or 5% of the population, by 2035( ONS 2012). This made it necessary for the government to launch the National Service Frame work (NSF) for older people(2001) which contained eight standards relating to older people’s services covering the full range of care older people need. The standards embody fundamental principles ensuring care is based on clinical need, not age, and that services treat older people as individuals, promoting their quality of life, independence, dignity and their right to make choices about their own care. This essay aims to explore how guidelines and policies are implemented in a residential care home in London to promote the well-being of the elderly and also further investigate the specific risk factors concerning the health and well-being of the elderly. Well-being has become an important focus for health and social policy in general, and in relation to older people in particular...
Words: 2593 - Pages: 11
...cases that require the student to access the authoritative literature to address the issue presented in the case. Solutions to the cases below are available to instructors on the Weirich Accounting & Auditing Research 7e instructor website at www.wiley.com/college/weirich. Other excellent sources of longer and more detailed cases include the Deloitte Trueblood cases (www.deloitte.com/more/DTF/cases_subj.htm), as well as the AICPA cases (www.aicpa.org). Topical Index of Student Cases INTERMEDIATE ACCOUNTING Case 1: Reporting acquisition and repayment transactions in the Statement of Cash Flows Case 2: Recording a forfeited payment Case 3: Revenue and expense recognition associated extended warranties Case 4: Accounting for “due on demand” note payable Case 5: Purchase of a controlling interest with a greenmail premium Case 6: Revenue recognition in the construction industry Case 7: Accrual and measurement of interest payments Case 8: Recognition of an asset transfer when title has not yet been received Case 9: Capitalization of interest and property taxes on a construction project Case 10: Deferred compensation and life insurance policy recognition Case 11: Reporting earnings per share balances for subsidiary companies Case 12: Deferment of lease payments Case 13: Disclosure of prior period adjustments in the statement of cash flows Case 14: Measurement and recording of payments for sick days Case 15: Comparative cash flow...
Words: 5765 - Pages: 24
