Chapter 1 A Survey of International Accounting A brief description of the major points covered in each case and problem. CASES Case 1 In this case, students are introduced to the difference in accounting for R&D costs between IFRS and U.S. GAAP and asked to comment on whether one method is better than the other, as well as whether any part of R&D should be capitalized. Case 2 (prepared by Peter Secord, Saint Mary’s University) In this real life case, students are asked to discuss
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EXECUTIVE SUMMARY This paper describes the current position of Seven West Media for the past three years and also shows the forecast of the company for financial year 2012. This would help investors and researchers to decide on investing to SWM or not. SWM has been analyzed step by step in order to find out its true value in the industry. The analysts have first looked into SWM business and strategy where it has been noted that SWM was a result of merger of seven group holdings and Australian
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4011 APRIL 7, 2009 CRAIG CHAPMAN Biovail Corporation: Revenue Recognition and FOB Sales Accounting Background Late on October 9, 2003, David Maris, an analyst at Banc of America Securities (BAS), was trying to interpret the shocking events of the previous few days and finish the write-up of his first report on the Canadian pharmaceutical firm, Biovail Corporation. Maris didn’t like what he saw at the company, but he never liked writing “Sell” recommendations. In any event, he wanted
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principles that Nortel executives were accused of were going against the revenue recognition principle and the provisions principles. Nortel broke the revenue recognition principle for the sole purpose of meeting budgeted sales and revenues (Cullen 2007). What Nortel would do was to not recognize expenses right away and to recognize unearned revenue (Cullen 2007). The reason for breaking these rules was to magnify their revenue and profits. Nortel broke the provisions principle by recognizing their
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the date] | Introduction Sara Lee Corporation, then known as C.D. Kenny Company, was established in 1939 and had net sales of $24 million. By 1998-1999 the company had acquired over forty related and non-related businesses and had peaked at revenues of $20 billion. During the late 1990’s Sara Lee managers began to experience a difficult time in managing the company and increasing profits. This was due to the highly diversified and globally scattered operations that Sara Lee Corp. had developed
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bills. An electric utility company can estimate with reasonable certainty the expected revenue in a given period by taking into consideration some of the following: customer habits, average historical trends, demand and supply forecasts, and environmental changes. The electric utility industry effectively uses an insurance industry concept—the law of large numbers, to determine with certainty, expected revenue. The law of large numbers states, as the number of participants (customers) in a risk class
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principle- Revenues and expenses are reported at the same accounting period. Monetary unit- Money is the best and most use denominator of economic activity, it is easy to understand and relevant to most if not all professionals and investors. Revenue recognition principle- this principle deals with the time period for the revenue recording, under the accrual basis of accounting revenue should be recorded whenever the organization completed the task needed for generating the revenue, under the
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accordance with generally accepted accounting principles. One of these principles is the revenue recognition principle, which provides that revenues should be recognized when they are earned. Typically, sales revenues are earned when the goods are transferred to the buyer from the seller. At this point, the sales transaction is completed and the sales price is established. Thus, in the typical situation, revenue on the surfboard ordered by Flutie is earned at event No. 8, when Flutie picks up the
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MiniScribe’s revenue recognition practices were consistent with GAAP, Reggie Lewis should have reviewed Section 605 of the Accounting Standards Codification concerning everything surrounding revenue recognition. More specifically ASC 605-25-1 states that, “The recognition of revenue of an entity during a period involves consideration of the following two factors, being realized or realizable and being earned.” In terms of revenue realization, FASB Concepts Statement No. 5 states that, “revenue is realized
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decrease) of revenues, profits, or earnings per share figures through aggressive accounting tactics on all earnings. Aggressive earnings management is a form of fraud which differs from reporting error. Most of this happens when management of the companies need to present and show the earnings at a certain level or certain loopholes in financial reporting standards. These are fraudulent reporting due to unfulfilling the accounting practice principles with the techniques of revenue recognition, accounting
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