Financial Accounting Concerns 1. Tokyo AFM recognized premium revenue at the time it received the policyholder’s up-front cash payment. The company’s accountants argued that since the level of up-front payments received from policyholders had been stable over the last few years, this method was an appropriate reflection of economic reality. For example, Fuji Computers entered into a five-year insurance contract with Tokyo AFM against earthquake damage to its headquarters building. As is
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CHAPTER 5 Revenue Recognition and Profitability Analysis Part A: Introduction to Revenue Recognition I. Revenue Recognition in General A. FASB definition: “Revenues are inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or other activities that constitute the entity’s ongoing major or central operations.” In other words, revenue tracks the inflow of net assets that occurs
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1. Is Eye Vision’s arrangement with Holland Hospital within the scope of ASC 985-605, Software: Revenue Recognition? In this case, the main content of the Eye Vision’s arrangement with Holland Hospital include embedded software medical equipment and an initial option to purchase a two-year separately priced maintenance agreement. In this case, because “Eye Vision has never sold, nor does it offer to sell, the Clear View Laser without the embedded software because the software is necessary to perform
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Advanced Issues in Revenue Recognition CONTENT ANALYSIS OF END-OF-CHAPTER ASSIGNMENTS NUMBER TOPIC CONTENT LO ADAPTED DIFFICULTY TIME EST. AACSB AICPA BLOOM’S Q17-1 Revenue Recognition Recognition of revenue when the earnings process is not complete 1 ! Easy 5 Analytic Measurement Comprehension Q17-2 Revenue Recognition Distinguish between
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CHAPTER 18 REVENUE RECOGNITION IFRS questions are available at the end of this chapter. TRUE-FALSe—Conceptual Answer No. Description F 1. Recognition of revenue. T 2. Realization of revenue. T 3. Delayed recognition of revenue. F 4. Recognizing revenue when right of return exists. T 5. Recognizing revenue prior to product completion. F 6. Use of percentage-of-completion method. T 7. Input measure for contract progress. T 8. Reporting Construction in Process and Billings
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Statement of Financial Accounting Concepts(CON) 5,Recognition and Meaurement in Financial Statements of Business Enterprises, revenue is considered “earned” if an entity has substantially accomplished what it must do to be entitled to the contractual benefits. Revenue is “realizable” when related assets received are readily convertible to cash or claims to cash. In this case, SolvGen should recognize the nonrefundable milestone payments as revenue when Careway launches the proprietary instrument
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Exercise 5–6 Requirement 1 July 1, 2013 Installment receivables ................................................... 300,000 Sales revenue .............................................................. 300,000 To record installment sale Cost of goods sold .......................................................... 120,000 Inventory..................................................................... 120,000 To record cost of installment sale Cash ..................................................
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airlines account for frequent flyer points. In the past, the cost/provision approach accounting practices were used. Under this method, the upfront sale of points to bank, credit card companies, mortgage brokers, and general retailers was recorded as revenue in the income statement at the time of sale. The expense related to the sale, that is the cost of travel, was recorded at a later period, when the airline provided the travel service, or gave up the ‘free’ seat. The Australian Financial Review (AFR)
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immediate feedback about how well they are doing. For example, management usually wants monthly reports on financial results, most large corporations are required to present quarterly and annual financial statements to stockholders, and the Internal Revenue Service requires all businesses to file annual tax returns. Many business transactions affect more than one of these arbitrary time periods. For example, a new building purchased by Bank of America or a new airplane purchased by Southwest Airlines
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technology that people relate with. Doctors use speech recognition as a form of communication not only for transcription and dictation but also as clinical decision support (just in case). In this paper, the author will discuss the effective and efficient, advantages and disadvantages, as well of the short-and-long term financial impact of speech recognition. Framework and propositions suggest that successful implement of the speech-recognition technology will positively affect performance in the
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