Chabra Mr. Butkovic BAT 4M March 21st 2012 Case Analysis Revenue recognition As a financial advisor of Dodge Ltd the financial statements should be review by the owners or CFO of the company. This statement will display the revenue recognition in order for the owner to accurately keep track of their finances. Since, this business has costs throughout the contract, they have issues dealing with the recognition of the revenue. Some costs cannot be allotted for at the sale of the contract because
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Discussion Question 1: A. Merchant, Inc should not recognize revenue for the membership fees and accrue the costs to provide membership services at the outset of the arrangement. According to Staff Accounting Bulletin No. 101, one of the realization principles is “delivery has occurred or services have been rendered”. After customers paid for the membership fees, Merchant Inc still has unfulfilled obligations to perform services promised to its customers throughout the entire membership period
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> Delivery Has Occurred 25-18 The second criterion in paragraph 985-605-25-3 for revenue recognition is delivery. The principle of not recognizing revenue before delivery applies whether the customer is a user or a reseller. Except for arrangements in which the fee is a function of the number of copies, delivery is considered to have occurred upon the transfer of the product master or, if the product master is not to be delivered, upon the transfer of the first copy. For software that is
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American Trucking Company has recently been experiencing an increase in stolen loads—a loaded tractor/trailer is stolen and the load sold. The merchandise is often worth thousands of dollars, sometimes exceeding the value of the tractor/trailer. American Trucking, while wishing to recover both the load and equipment, seeks a way to locate the tractor/trailer at all times so they can dispatch their security team to retrieve the load before it is sold on the black market (as well as to retrieve the
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605-25-30-4 thru 30-5 ASC 605-25-30-6A ASC 605-10-25-1 C.What is your conclusion as to the appropriate accounting conclusion, be specific as to the timing of the accounting recognition. Both the activation card and prepaid voucher have standalone value and can be recognized as separate units of accounting. The $150 revenue earned should be allocated to the sale of the new activation card and prepaid voucher on the basis of their relative selling price. Selling price determinations: ASC 605-25-30-6A(b)
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Assignment – SPRING INTRODUCTION Revenue recognition is one of the top causes for financial statement restatements (Whitehouse 2010). In addition, revenue recognition is an area commonly questioned by the Securities and Exchange Commission (SEC) staff in their review of public filings and resultant comment letter process (Deloitte 2009). Furthermore, revenue recognition is often prey to financial fraud (PricewaterhouseCoopers 2009). Coverage of revenue recognition in intermediate accounting courses
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and development has value, and also the five milestones as a whole have value, this being that without the research and development to support the five milestones, there is no measure of their true value if sold to another party. Milestone Revenue Recognition Under FASB 605-25-55 we have concluded that a deliverable be measured and accounted for separately under these circumstances: (1) The delivered item has value to the customer on a standalone basis, (2) There is objective and reliable evidence
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Revenue Recognition-Contracts with Customers “Conversion will supply “a kinder, gentler approach” and hopefully make up for its implementation pains by improving and simplifying financial reports, he says. “But there will be abuses. Human nature never changes.” ---Revenue Recognition.com Contributor ABSTRACT On May 28, 2004, the Financial Accounting Standards Board (FASB) and International Accounting Standard Board (FASB) issued
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RESEARCH: Accounting Standard Codification (ASC) 1. FASB had four primary goals in developing the codification. List these four goals: 1. Simplify user access to all authoritative U.S. GAAP by putting them all in one place with codification 2. Assist FASB with the research and international convergence efforts required during the standard-setting process 3. Become the authoritative source of literature for the completed extensible business reporting language (XBRL) taxonomy 4. Clarify that
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To: CFO of Coconut Telegraph From: Grant Curran Subject: Impact of New Revenue Recognition Standard CFO, According to the new standard the agreement on March 1, 2014 should be combined with the original agreement. The services and training in the March agreement are of similar nature and there is a common objective between the two agreements. The addition of these obligations isn’t going to change the main objective of the original contract. The second agreement between Coconut and Buffet
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