Revenue Recognition Essay

MEMORANDUM Re:      Group 2 - Case 2.1 “Software Revenue Recognition: Informix Corporation” Companies following GAAP can manage earnings by simply altering its accounting policy to select those accounting principles that benefit them the most. Entities have a host of reasons for selecting those principles that will paint the rosiest financial picture. Some would argue that the market demands it, as reflected by the stock price punishment for companies that differ

Introduction This assignment features the recognition and measurement of revenue depending on the source of revenue in accordance with the provisions of International Accounting Standards (IAS) 18 Revenue. I researched the topic and defined the special purposes of the assignment: first of all, it is important to know the main concepts of IAS 18, also to learn the rules by using this particular regulatory framework, and to get knowledge about writing the report at all.

Revenue recognition is currently one of the most complex areas of accounting, however it hasn’t always been this way. From relatively simple beginnings, the guidance for recognizing revenue has grown larger and more complex along with the business environment. One reason revenue recognition has needed frequent improvement is its vulnerability to fraud. It has been recorded that several frauds during the 1987-2007 time period were a result of an overstatements of revenue, typically at the end of an

Accounting Standards Update 2014-09 Revenue from Contracts with Customers (Topic 606) ACCT 610 Financial Reporting and Disclosure Daisy Gaytan California State University, San Bernardino Abstract 1. General Accepted Accounting Principles (GAAP): The Revenue Recognition Principle Revenue recognition is a difficult matter in accounting. The company’s results differ depending of the method used to recognized earnings. This is a complex situation since business activities are broad

Revenue is one of the largest amount in the income statement. This number represents the efficiency of business operations, sales and company’s strategy. Since net income is a part of revenue, investors pay close attention to this element. Top-management of the company may manipulate both sales and receivables in order to produce better financial results. Revenue recognition accounting standards ensure that accurate amount of revenue is recognized in a proper period. Revenue recognition principle

Revenue Recognition: IFRS and FASB Convergence With the growth of international business there is a need to standardize financial statements globally. Presently there are “approximately 120 foreign private issuers currently that report to the Commission using IFRS financial statements.” By standardizing accounting practices investors will be able to make informed decisions based on comparability and accuracy of financial statements. The SEC released this statement in 2008, “We believe that

Vitamix Revenue Recognition – “Special Cases” Proper revenue recognition is important in because it has a direct impact on quarterly income statements, incentive calculations, investor confidence, and perception of an organizations financial health. The scandals at Enron and WorldCom illustrate how important properly recognize revenue is to the financial integrity of a company and how abuse can be extremely dangerous. (Labaton, 2006) To maintain consistency across organizations, the Securities and

a) -Revenues are inflows of assets or settlements of liabilities or both. Revenues come from activities of the entity’s central operations. -Gains are increases in net assets and from peripheral or incidental transactions of an entity. -The difference between gains and revenues depend to a great extent on the typical activities of a company. For example, when McDonald’s sells a hamburger, it records the selling price as revenue. However, when Mc Donald’s sells land, it records any excess of

Revenue recognition on FASB and IASB convergence process I. CONVERGENCE OF U.S. GAAP AND IFRS Since 2002, Financial Accounting Standards Board (FASB) and International Accounting Standards Board’s (IASB) have been working toward “convergence” of US General Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). They have made significant progress in efforts to converge critical accounting standards such as those dealing with revenue recognition,

Revenue Recognition: Case Study on Caltron Computers, Inc. Julie Mong April 17 , 2010 1. In general, evaluate Caltron's revenue recognition policy and the quality of Caltron's earnings. Caltron Computers, Inc., a computer hardware company, is publicly held with market capitalization amounting to over $450 million. Carlton’s system designs enable their mini-computer systems to measure up to the power of mainframes with small cost outlays. The accounting practices