Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Acquiring a Company
Over the last several years, globalization has been having profound impact upon how various revenues are being accounted for. This is because there has been a concentrated effort, to create a universal accounting standard that can be utilized around the world. In the case of SolvGen and Careway, this could mean that possible changes may have an impact upon how various revenues are reported. To determine the underlying effect that this will have on both companies requires: examining the deliverables arrangement, when milestone payments should be recognized as revenues and if IFRS changes will have an impact upon the way this is recorded. Together, these different elements will provide the greatest insights, as to how these changes will affect SolvGen and Careway.
What are the deliverables for the arrangement described in the case study above?
Under the agreement the deliverable for SolvGen include: Commercial launch of instrument system Version 1, Commercial launch of instrument system Version 2 and Commercial launch of instrument system Version 3. The deliverables for Careway are the ability to market / distribute the different...
This is important, because it is showing how both companies will have actual products that they will have to account for (based upon multiple streams of revenues). ("Revenue Recognition," 2009) ("Case 10 -1," n.d.)
When should the milestone payments received to date by SolvGen be recognized as revenue?
The different milestone payments should be recognized as revenues in the quarters that the income was received. For example, SolveGen has two milestone payments (the exclusive negotiation payment and contract signing payment). The exclusive negotiation payment was received in December 2005, while the negotiation payment was received in January 2006. As a result, the exclusive negotiation payment would be reflected in the quarterly earnings of the company for the fourth quarter of 2005. The negation payment will be reflected on the first quarter earnings of 2006. This is important, because under FASB guidelines all milestone payments must be reflected in the quarter that they were received (to provide the most accurate information to shareholders and regulators). ("Revenue Recognition Milestone Method," 2010) ("Case 10…
Bibliography
Case 10 -1. (2006).
Revenue Recognition. (2009). FASB. Retrieved from: http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175819938544&blobheader=application%2Fpdf
Revenue Recognition Milestone Method. (2010). FASB. Retrieved from: http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175820624057&blobheader=application/pdf
Opportunities . Indian elevator market growth is very promising in the 1995 timeframe, which is when this case study takes place. The low-end of the Indian elevator market is experiencing 27% increases in unit shipments, and 17% unit increases overall. . The market itself is highly fragmented for elevators in India. 70% of the demand for elevators is at the low-end of the market; 20% at the middle-end, and 10% at the top-end. . High levels of recurring
Sabmiller Case Study SABMiller Breweries Company Case Study SABMiller Breweries Company SABMiller Breweries Company SABMiller breweries Company has grown since it begun over the years adopting different business strategies for its survival in the market. Surrounding environmental factors have affected its growth, and strategies that are put to counter different environmental situations. SABMiller is a South African company with its base in Johannesburg. It grew to being the second largest brewer company in the
Hershey's Sweet Mission case study - A Harshey's Sweet Mission case study Harshey company case study Hershey Company is one of the leading North American companies that specialize in manufacturing quality chocolates, chocolate related grocery and other non-chocolate products such as mint and gum. As a company with a humble beginning back in the year 1894, it has continued to manufacture chocolates and other products that were once perceived to be only for
Ethics Case Study This report presents an analysis of the ethical challenges faced by two organizations -- one in the not-for-profit sector named Susan G. Komen for the Cure and one in the for-profit sector named The Lubrizol Corporation. A brief background of the two organizations is provided which also includes a description of the ethical challenge. Several alternatives for each organization are discussed along with implications for various stakeholders. Out
Polaris & Victory: Entering & Growing the Motorcycle Business Strategic Profile and Case Analysis Purpose This is a case study of Polaris Industries and how they managed to enter the motorcycle market in 1998 with the Victory brand of motorcycles. The charge was led by Matt Parks who joined the company in 1987, by being asked to conduct research on the viability of Polaris entering the motorcycle market (Hitt, Ireland, & Hoskisson,
Today, such knowledge is essential and only by assessing the workforce needs and revising specifications can a company remain current and relevant with the demands of the age. Q6. In the first paragraph of the case study, what is meant by turnover? Turnover is used to mean the net value accrued by the company. Q7. Why is it important for a business such as Enterprise Rent -A -Car to have aims? The rental