Standards Board) 2. The purposes of the joint long-term project of the FASB and IASB to converge revenue recognition principles include all of the following except (Points: 4) eliminate inconsistencies in conceptual guidance on revenues replace principle-based accounting with rule-based accounting for revenues establish a single comprehensive standard on revenue recognition fill voids in revenue recognition guidance 3. Certain U.S. accounting standards have been, and will be, amended to aid in the
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Intermediate Accounting A Series of Revenue Recognition Research Cases Using the Codification Case One: Consumer Cleaning Products Corporation (CCPC) Case Two: Landline Corporation Case Three: Assembly Lines Incorporated (ALI) Submitted By Chen Chongxiao Sweta Shah Xiaoyun zhang Case One
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Identify the issues ASC 605-25 If a vendor does not have vendor-specific objective evidence or thirdparty evidence of selling price for the undelivered elements in an arrangement, the revenue associated with both delivered and undelivered elements are combined into one unit of accounting. Any revenue attributable to the delivered products is then deferred and recognized as the undelivered elements are delivered by the vendor. An Additionally, eliminating the residual method of allocation
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Introduction While United States Generally Accepted Accounting Principles (U.S. GAAP) are required throughout the United States, other countries utilize other methods of classifying their financial statement items. While the standards of accounting differ among many countries, there has recently been an effort to attain a universal set of standards under International Financial Reporting Standards (IFRS). While this has not yet been achieved, multiple countries have made an effort to converge
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current revenue recognition policy (ies)? 2. Using the limited information in the case, do the industry characteristics or the current revenue recognition policies encourage manipulation of revenues? If so, how could Wareham manipulate its earnings? 3. For each of the specific contracts described in the case, please describe the best revenue recognition policy considering the criteria in SAB 101. (Onsetcom, Cataumet, Sandham, XLSemi, Technical Devices and Ashaban) TechMall.com’s Revenues Note
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Development Cost Expensed Effect on Pre-Tax Proft 516 1054 1516 656 1118 -462 Microsoft Revenue Recognition Policy Effects Without considering the tax effect, the unearned revenues are down to 0 every quarter and the unearned revenues are transferred to retained earnings. 1996 Q1 Q2 Q3 Q4 Q1 Q2 1997 Q3 Q4 Q1 Q2 1998 Q3 Q4 Q1 Q2 1999 Q3 Q4 Revenue Uneared Allocation of Uneared Revenue 2085 307 2287 495 38 2311 545 38 62 2367 560 38 62 68 2405 651 38 62 68 70 2808 1013
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The last scenario is to resolve revenue from a non-refundable prepayment for the right to receive goods or services in the future, such as a gift card in this case (IFRS 15 BC396). According to IFRS 15.B44, UCL should recognize a contract liability in the amount of the prepayment for its performance obligation to transfer in the future. UCL shall derecognize that contract liability (and recognize revenue) when it transfers those goods or services and, therefore, satisfies its performance obligation
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States, is fairly profitable, it is not enough to fulfill their goal: to save up $8.9 million in order to buy a ranch so that they can expand their services and accommodations. Currently, Mystic Monk Coffee makes $56,500 per month in revenue, 11% of it being net revenue. With Mystic Monk Coffee’s current strategy, it would take almost 120 years to raise enough for the ranch with only the coffee operations. Direction, Vision, and Mission Father Daniel of the Carmelite Monks of Wyoming desires to
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follows: * A new standard were introduce such as IFRS 6 Exploration for and Evaluation of Mineral Resources. * five Interpretations-IFRICs 1-5 * Amendments were made related to IAS 19 Employee Benefits, IAS 39 Financial Instruments: Recognition and Measurement and SIC-12 Consolidation-Special Purpose Entities * Amendments were made for other IFRSs resulting from those pronouncements together with editorial corrections. http://www.ifrs.org/Archive/Press-Relases-Archive/2005/Pages/IASB-publishes-complete-standards-for-2005
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Intermediate Accounting Chapter 1 * Essential characteristics of accounting are (1) the identification, measurement, and communication of financial information about (2) economic entities to (3) interested parties * Financial accounting – process that culminates in the preparation of financial reports on the enterprise for use by both internal and external parties * Users – investors, creditors, managers, unions, and government agencies * financial statements – (1) the
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