conceptual framework, and IFRS terms. There is also a description of some issues the SEC must consider in order to adopt IFRS in the United States as well as a comparison of the rules regarding revenue recognition under IFRS versus GAAP. There is an explanation of the definitions Under IFRS for revenues and expenses, as well as an explanation of the competitive implications (both pros and cons) of Sarbanes-Oxley Act (SOX). Questions IFRS 2-1: In what ways does the format of a statement of financial
Words: 957 - Pages: 4
CHAPTER 5 Revenue Recognition after Delivery * Assumes we are able to make reasonable estimates of amounts due from customers that potentially might be uncollectible. * For product sales this also includes amounts not collectible due to customers returning the products they purchased. Installment Sales * Increasing the length of time allowed for payment usually increases the uncertainty about whether the store actually will collect a receivable * The increased uncertainty concerning
Words: 5638 - Pages: 23
Objective 1: Apply the recognition criteria for revenues and expenses Revenue Recognition Revenue should be recognized when it has been earned 1. Entity should have completed or performed the majority of the tasks related to the sale 2. The amount of the sale is known 3. There is reasonable assurance that the amount earned will be collected Record revenue equal to the cash value of the goods or service transferred to the customer Recognition criteria for expenses Expenses are the cost of
Words: 905 - Pages: 4
The BIGGER Picture (Ch. 1) Why do we need financial reporting? What is its purpose? Who are some of the key players in financial reporting? PROVIDER EXTERNAL USERS REGULATORS Your textbook (as most out there) evaluates accounting issues from a FASB perspective. We will discuss issues from the FASB’s conceptual framework, but also will try to think about others’ perspectives as well. Before we talk about the conceptual framework, we will discuss the structure of the ultimate product of the
Words: 2307 - Pages: 10
approved by GAAP. Cash basis accounting is the method in which cash receipts and cash payments are recorded during the period in which they occur (Spiceland et. al., p. 7). Under the cash basis accounting method, the revenue is recognized when the cash is received and the expense is recognized when the cash is disbursed. In addition, there is no inventory account under the cash basis method. Goods and materials purchased for sale are recorded as direct costs in the period that payment is made for
Words: 575 - Pages: 3
____________________________________________________________ __ Revenue: $12,000,000 Total Revenue $12,000,000 Expenses: Expenses $ 9,000,000 Depreciation $ 1,500,000 Total Expenses $ 10,500,000 Net Income $1,500,0000 2. What were Brandywine’s 2007 net income, total profit margin, and cash flow? Brandywine’s net income for 2007 was $1,500,000. Net Income = Total revenue - Expenses Net Income = $12,000,000 - $1,500,000 = $1,500
Words: 993 - Pages: 4
the timing of the revenue and expense recognition we should introduce a term related to loyalty programs which is called “breakage”. Breakage is the difference between points issued and points redeemed. Since S&H are getting cash for stamps issued to customers regardless of whether they are redeemed for goods later on (or not), the difference between the two is a major factor in their income and profitability. As we have learned, the realization principle is the concept that revenue can only be recognized
Words: 381 - Pages: 2
$13000. The company had the highest market value of approx. $460 billion in 1999. The revenue and operating income grew an avg. of 43% and 49% per year respectively. However, Microsoft has always been conservative in its accounting choices. This case explores Microsoft's overall financial reporting strategy by examining the company's treatment of two accounting issues--software capitalization and revenue recognition. For both issues, the company selects accounting methods that are relatively conservative
Words: 1931 - Pages: 8
categories of revenues that are deducted from expenses to compute the net expenses or revenues for each function or program shown in the government wide statement of activities are: Charges for services; Program-specific operating grants and contributions; Program-specific capital grants and contributions 6. Interfund activities and balances reported in government wide financial statements are ISF operating statements and funds that buy services from ISFs report expenditures or expenses as a result
Words: 464 - Pages: 2
C H A P T E R 2 CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING LEARNING OBJECTIVES After studying this chapter, you should be able to: •1 •2 •3 •4 Describe the usefulness of a conceptual framework. Describe efforts to construct a conceptual framework. Understand the objective of financial reporting. Identify the qualitative characteristics of accounting information. Define the basic elements of financial statements. •6 •7 Describe the basic assumptions of accounting. Explain the
Words: 22128 - Pages: 89
