...Trueblood Case 14-3: Coconut Telegraph Brett O’Baker 9/14/15 Facts: * Coconut Telegraph Corporation (Coconut) is a developer and provider of specialized customer billings and management software and systems * On February 1, 2012, Coconut entered into an arrangement with Buffett Worldwide Inc. (Buffett) to deliver the Volcano System and provide one year of post-contract customer support (PCS) beginning March 1, 2012. * Buffett paid $12,000 on February 1, 2012, for the Volcano System and the related PCS. On May 1, 2012, and in a separate contract, Coconut agreed to provide Buffett with (1) training services on the customer management system and (2) an additional year of PCS. * Under the terms of this agreement, Buffett immediately paid consideration of $4,500 for the additional services. 1. Is Coconut’s February 1, 2012, arrangement with Buffett within the scope of ASC 985-605? Per ASC 985-605-15-3c, the software and software-related elements of arrangements that include software that is more-than-incidental to the products or services in the arrangement as a whole are within the scope. Indicators that software is more-than-incidental to the products or services in an arrangement as a whole include (but are not limited to): 1. The software is a significant focus of the marketing effort or is sold separately. 2. The vendor is providing post-contract customer support. 3. The vendor incurs significant costs that are within the scope of Subtopic 985-20...
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...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 every credit hour in class. Thus, for this 3-credit class, you should plan to invest at least nine hours per week in preparation and homework—plus...
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...Trueblood: US GAAP - Case 15-5 ASC470-60-20 states that a “a restructuring of a debt constitutes a troubled debt restructuring if the creditor for economic or legal reasons related to the debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider.” Although the “Restructuring” was done due to the debtor’s financial difficulty, there was no concession made by any of the creditors. The effective borrowing rate when considering all the terms of the “Modified Debt” is greater than the effective borrowing rate immediately prior to the “Restructuring”. All of the characteristics of the debtor’s situation should be considered when determining whether a modification constitutes troubled debt. The model and criteria discussed in ASC 470-60-55-4 through 55-14 should be followed. Since the circumstance do not warrant a “Troubled Debt” classification, the rules of 470-50 would be followed as either a Modification or Extinguishment. Resort Co. is extinguished from their liability, according to ASC 405, if either the debtor pays the creditor or the debtor is relieved of the obligation. If debt is extinguished before the scheduled and maturity date, a gain or loss may arise that amounts to the difference between the carrying value(including issuance costs) and the amount paid to settle the liability(including premium). The general rule for ASC 470-50-40-2 is a gain or loss must be recognized between the carrying value and fair value of...
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...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...
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...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 to be simple yet reasonably complete. These objectives define the domain of discourse for this thesis. In Step 2, Section 2.2, the information needed to meet these objectives is discussed. In Step 3, Section 2.3, the data needed to provide that information are considered. It turns out that the data needed for most recommended systems of accounting are far more homogeneous than might, at...
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...Trueblood case 11-3: Masters of the Universe 1. Statement of the problem: Applying key concepts of the VIE model in ASC 810-10 (Statement 167), in order to perform a consolidation analysis for a Variable Interest Entity (VIE). 2. Summary of relevant (key) facts As the case depicts, ‘Jupiter’ is a joint venture formed by 2 unrelated parties, Saturn Inc. and Venus Inc. Jupiter has been created with the purpose of owning and operating organic clothing manufacturing and design facilities and selling the output to unrelated retailers. The key facts highlighted in the case are as follows: * The proportion of Saturn’s and Venus’s ownership interest( as determined by their capital contribution) in Jupiter is 51 percent and 49 percent respectively; same is the ratio in which Jupiter’s profit and losses are shared between the two parties * From Saturn’s viewpoint, Jupiter fails to qualify for joint venture scope exception stated in ASC 810-10-15-17(d) * In accordance with ASC 810-10-25-42 and 25-43, Saturn and Venus cannot be considered as related parties * As pursued by ASC 810-10-15-14(a), Jupiter is viewed as a Variable Interest Entity due to the entity’s nature and the amount of equity investment at risk * Jupiter’s Articles of Incorporation requires a majority vote for approval of most of the Board’s decisions, with the exception of decisions concerning the CEO’s appointment or removal, mergers or acquisitions, admitting new members into the joint venture...
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...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 Goodwill represents the unique value of the company as a whole over and above all...
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...VOLUME EDITOR S. WALLER is an Associate Professor of Philosophy at Montana State University Bozeman. Her areas of research are philosophy of neurology, philosophy of cognitive ethology (especially dolphins, wolves, and coyotes), and philosophy of mind, specifically the parts of the mind we disavow. SERIES EDITOR FRITZ ALLHOFF is an Assistant Professor in the Philosophy Department at Western Michigan University, as well as a Senior Research Fellow at the Australian National University’s Centre for Applied Philosophy and Public Ethics. In addition to editing the Philosophy for Everyone series, Allhoff is the volume editor or co-editor for several titles, including Wine & Philosophy (Wiley-Blackwell, 2007), Whiskey & Philosophy (with Marcus P. Adams, Wiley, 2009), and Food & Philosophy (with Dave Monroe,Wiley-Blackwell, 2007). P H I L O S O P H Y F O R E V E RYO N E Series editor: Fritz Allhoff Not so much a subject matter, philosophy is a way of thinking.Thinking not just about the Big Questions, but about little ones too.This series invites everyone to ponder things they care about, big or small, significant, serious … or just curious. Running & Philosophy: A Marathon for the Mind Edited by Michael W. Austin Wine & Philosophy: A Symposium on Thinking and Drinking Edited by Fritz Allhoff Food & Philosophy: Eat,Think and Be Merry Edited by Fritz Allhoff and Dave Monroe Beer & Philosophy: The Unexamined Beer Isn’t Worth Drinking Edited by Steven D. Hales Whiskey & Philosophy:...
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...STUDENT CASES to accompany Accounting & Auditing Research: Tools & Strategies, 7e NOTE: In addition to the in-chapter and end-of-chapter exercises which serve as short cases you will find the following short cases arranged by course title that can also be utilized as short 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...
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...STUDENT CASES to accompany Accounting & Auditing Research: Tools & Strategies, 7e NOTE: In addition to the in-chapter and end-of-chapter exercises which serve as short cases you will find the following short cases arranged by course title that can also be utilized as short 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...
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...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...
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...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...
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...Chapter 16 Accounting for Income Taxes Questions for Review of Key Topics Question 16-1 Income tax expense is comprised of both the current and the deferred tax consequences of events and transactions already recognized. Specifically, it includes (a) the income tax that is payable currently and (b) the change in the deferred tax liability (or asset). Apparently, in the situation described, temporary differences required a $4.4 million increase in the deferred tax liability, a $4.4 million decrease in the deferred tax asset, or some combination of the two. Question 16-2 Temporary differences between the reported amount of an asset or liability in the financial statements and its tax basis are primarily caused by revenues, expenses, gains, and losses being included in taxable income in a year earlier or later than the year in which they are recognized for financial reporting purpose, although there are other, less common, events that can cause these temporary differences. Some temporary differences create deferred tax liabilities because they result in taxable amounts in some future year(s) when the related assets are recovered or the related liabilities are settled (when the temporary differences reverse). An example is the receivable created when installment sale gross profit is recognized for financial reporting purposes. When this asset is recovered, taxable amounts are produced because the installment sale gross profit is then recognized for tax purposes...
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...Intermediate Accounting, 7e, with the following AACSB learning skills: Questions 16–1 16–2 16–3 16–4 16–5 16–6 16–7 16–8 16–9 16–10 16–11 16–12 16–13 16–14 16–15 AACSB Tags Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking Diversity, Reflective thinking Analytic Analytic Analytic Analytic Analytic Analytic Reflective thinking Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Exercises (cont.) 16–6 16–7 16–8 16–9 16–10 16–11 16–12 16–13 16–14 16–15 16–16 16–17 16–18 16–19 16–20 16–21 16–22 16–23 16–24 16–25 16–26 16–27 16–28 16–29 16–30 AACSB Tags Reflective thinking Analytic Analytic Analytic Analytic Analytic Communications Analytic Analytic Analytic Analytic, Reflective thinking Analytic Analytic Analytic Analytic Analytic Analytic Reflective thinking Analytic Analytic, Reflective thinking Analytic, Reflective thinking Reflective thinking Analytic Reflective thinking Communications Analytic Analytic Analytic Analytic Analytic Analytic Analytic Diversity, Reflective thinking Reflective thinking Reflective thinking Reflective thinking Brief Exercises 16–1 16–1 16–2 16–3 16–4 16–5 16–6 16–7 16–8 16–9 16–10...
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...More Than a Numbers Game A Brief Histor y of Accounting Thomas A. King John Wiley & Sons, Inc. More Than a Numbers Game More Than a Numbers Game A Brief Histor y of Accounting Thomas A. King John Wiley & Sons, Inc. Copyright © 2006 by Thomas A. King. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability...
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