Revenue Recognition Essays (Examples)

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Revenue Recognition
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evenue recognition is a method by which one can determine when certain income can be recognized or considered as revenue. When we say "to recognize" we actually mean to record. This principle is used by several businesses and organizations to ensure that their accounting records are up-to-date and accurate. There are typically three important guidelines for revenue recognition. (Taub, 2011)
evenue is recognized when earned: In this case the earnings process must be fully complete. This means that revenue can only be recorded into the book of accounts when all transactions between a seller and the customer are complete. The seller of a particular product or service must have no obligation or duty towards the customer. So, the two types of transactions involved here are there selling of a product from inventory and the rendering of a service. Once the product is delivered to the final customer or the service is….

evenue recognition is significant because it not only defines to the leaders of the company that the product sold is doing well in its markets but also that the price on the product is comparable to the competition - shown through the return of high premiums and that all expenses to make said product are being received through the sale of these products. "Process of recording revenue, under one of the various methods, in the accounting period. In the period of revenue recognition, related expenses should be matched to revenue. The most often used method of recognizing revenue is at the time of sale or rendering of service. The cash basis of revenue recognition is also popular among service businesses. Other methods of revenue recognition include during production and at the completion of production" (Barron's Accounting Dictionary, 2010). evenue recognition should be offset by the expenses involved in producing the….

evenue ecognition
evenue is a mode of taxation that is charged by the central governing authority for the purpose of generation income for the government. evenue is charged on various items from the companies or on businesses that are conducted within the jurisdiction of the ruling authority (Bragg, 2010). evenue generation is a process that is crucial as it touches on the income and profit made by the body that is being charged. For this reasons, there are measures and rules that govern the process. These rules dictate what is to be taxed as revenue and the criterion to be followed in order to identify what revenue is. Thus, the need to recognize what revenue is for the various companies and organizations.

These criteria that regulate the process are usually documented as laws that are to be adhered to. There are objectives to identify what the revenue is key since; it helps….

Control environment: (i) Insistent accounting policies or practices. (ii) Demands from senior management to augment revenues and earnings (iii) Absence of involvement by the accounting or finance department in transactions or in the supervision of arrangements with distributors. (Practice Alert 98-3 evenue ecognition Issues)
Matters needing special consideration: (i) an alteration in the revenue recognition policy of the company. (ii) Sales terms do not meet the terms with the usual policies of the company. (iii) Longer duration of anticipated payment terms or installment receivables. (iv) Important sales or volumes of sales which are recorded during the or near the culmination of the reporting period. (v) Putting into use substandard contracts or agreements. (vi) Transaction with related parties. In order to reduce the danger of inappropriate revenue recognition, the audit is required to be planned and implemented with a suitable extent of professional disbelief. At the time of planning the audit,….

AUS 2016-08 Analysis The Accounting Standards Update (ASU 2016-08) covers the topic "Revenues from Contracts with Customers". This move was made to bring the FASB standards more in line with IASB standards, as part of the effort to converge US GAAP with IFRS standards. The main provisions of this update are as follows. "An entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration which the entity expects to be entitled in exchange for those goods or services." This sounds fairly straightforward. To achieve this core principle, "an entity should adapt the following steps:
· Identify the contract(s) with a customer
· Identify the performance obligations in the contract
· Determine the transaction price
· Allocate the transaction price to the performance obligations in the contract
· Recognize revenue when the entity satisfies a performance obligation
The FASB notes that "the amendments do not change….

Accounting Concepts
evenue ecognition: Its elevance and Significance

In the words of Kimmel, Weygandt and Kieso (2008), "the revenue recognition principle requires that companies recognize revenue in the accounting period in which it is earned." Unlike is the case in the cash basis of accounting, revenue under the accrual accounting basis is recognized on the sale of a certain commodity or the performance of a given service. Under the cash basis of accounting, the recording of revenue according to Kimmel, Weygandt and Kieso (2008) takes place when cash is received. Further, the authors point out that in this case, the recording of expenses takes place after cash is paid out.

It should be noted that alongside other accounting rules and principles, revenue recognition remains one of GAAP's most important standards. In most cases, companies do not receive payment for goods sold at the exact time of sale. This is more so the….

Accounting Case
Revenue recognition is a significant issue for several interrelated reasons. Appropriate guidelines for determining when revenue is recognized can keep companies from inflating their profits and boosting their apparent standing as well as establish criteria that makes it more difficult for companies to hide revenue for tax saving purposes or other reasons (Investopedia 2011). Generally speaking, revenues are recognized when payment is received for the rendering of services or provision of goods by a company, though in certain situations other criteria should be met or events occur before revenue is recognized (Investopedia 2011). Companies that extend large amounts of credit with high rates of return might reasonably count revenues at the time of service/good provision and before actual payment is received, for instance, while companies that receive a lot of returns should do just the opposite.

The matching concept requires that the assets responsible for the creation of recognized revenues….

Jet Blue Case StudyWill the new revenue standard provide more decision-useful information than prior U.S. GAAP?Generally speaking, revenue recognition is the process of recording revenue in a company\\\'s accounting records. However, there are different ways to approach revenue recognition, and each perspective may slightly alter the way that revenue is recorded. For example, the cash basis approach simply records revenue when cash is received, regardless of when the product or service was actually sold. The accrual basis approach, on the other hand, records revenue when the sale is made, even if cash has not yet been received. There are also hybrid approaches that combine elements of both cash and accrual basis accounting. Ultimately, the most important thing is to be consistent in your accounting methods so that your financial statements accurately reflect the financial health of your business. With that said, there are some important points to consider in the….


Expensing of Stock Options

Expensing of stock options is a far more complicated issue. The Federal Accounting Standards oard (FAS) strongly recommends expensing of options and is trying to make it a legal requirement (Rash, 2004).

The pros of expensing options include providing a level playing field so that companies that use cash bonuses and companies that use stock options each have an expense on the income statement (McPeak). and, some believe it will improve corporate governance by reducing the incentives to inflate income and earnings per share.

However, there are many significant challenges for a company that expenses options (McPeak). Many companies have issued options to multiple levels of employees to attract high quality employees and to motivate them. If companies expense options at the time they are granted, it will be difficult to continue to grant options to as many employees. Some feel that there is already a level field between….

GAAP is a set of specific common guidelines, provided by the institutions such as the Financial Accounting Standards oard, the American Institute of Certified Public Accountants and the Securities and Exchange Commission, about "acceptable accounting practices"
These acceptable practices should not necessarily be regarded as a set of ground rules. In fact, it is a common denominator, useful when foreign firms, especially auditing companies, proceed to financial verifications. The GAAP provide for an easier task from the auditing companies and anybody else who interprets the financial statements.

In the case of Legal Plan Services, the GAAP guidelines will provide the necessary information that will permit a common evaluation, a common ground on which revenue and expenses can be considered. esides being interpretable by more than one side, the GAAP guidelines are, in this case, rules which allow for the company's accounting methods to be understood by others and would permit, in the….

Cash Flows and Revenue
PAGES 2 WORDS 487

Nike
In its 2016 Form 10-K, on page 106, Nike notes its policy with respect to depreciation as follows:

Depreciation is determined on a straight line basis for buildings and leasehold improvements over 2 to 40 years for machinery and equipment over 2 to 15 years.

Depreciation and amortization of assets used in manufacturing, warehousing, and product distribution are recorded in Cost of Sales. Depreciation and amortization of other assets are recorded in Operating Overhead Expense.

If Nike has incorrectly estimated the useful life, and the asset is impaired, it has a process for the impairment of such assets. The company would impair the asset on its remaining book value less the expected future cash flows from having the asset. If the asset is useful for longer than its book value, there is nothing that needs to be done. The purchase has been fully depreciated, so the asset has no more book value --….

"
The determination for marketable security with respect to disproportionate distribution is accomplished by reducing the amount of marketable securities that is treated as money using the following steps:

1. The excess of the partner's share of net gain that would be recognized if all securities of the type distributed held by the partnership immediately before the transaction were sold at fair market value over

2. The partner's share of gain that would be taken into account if the securities held by the partnership immediately after the transaction were sold.

While the term "marketable securities" includes interests in actively traded precious metals and other financial instruments that are set forth in the applicable IRC code and regulations, there are some exceptions to this provision, though, and it does not apply in three specific situations as noted below:

1. Contributed by partner. If the security itself was contributed to the partnership by the distributee-partner, the provision….

Internal evenue Service's Use of Circular 230 to egulate Tax Preparers
An oft repeated maxim in American history states sardonically that "in this world nothing can be said to be certain, except for death and taxes" (Franklin, 1840), and under the modern statutes of federal tax code that observation has never been more prescient. With taxes imposed by local, state and federal governments throughout the entirety of our natural lives, Americans living in 2012 may be facing the most extensive excises ever levied by one nation on its citizenry. Considering the dreaded annual income tax, the sales taxes added to the cost of consumer goods, and property taxes attached to home valuations, the average person is compelled to contribute thousands of dollars annually to support the revenue shortages of a mismanaged federal government. Even the choice to gift a sum of money to your child, spouse or lifelong friend, perhaps….

Furthermore, capital gains normally tend to be spread across a wider income scale than many believe. According to the IRS Individual Income Tax Returns, Preliminary Data, 1992 federal income tax returns, 55% of returns claiming capital gains were from incomes of $50,000 or less, including a capital gain (Thorning, 1995). hat this information appears to come down to is that the capital gains tax affects almost everyone, which happens to affect the economy in general.
Tax Act of 2011

ith some of the huge advantages that have been back loaded, the Tax Relief Act of 2001 displays itself as more of a tax odyssey than what would be considered a tax act. The most positive of those that are called our planners really just provide estate tax repeal which is a 50/50 possibility of essentially being executed. Taxpayers and planners similarly are left with the troublesome query, "hat is the contemporary….

Louis Vuitton -- Case Study
Key Issues

To formulate a plan for the expansion of the brand into the international market. The planning and execution of strategies that would help on long-term commitment of support in the international market, depending upon different parts of the world.

The formulation of strategies and plans in cases of economic down times and interference of government policies.

Assess the performance of the company by taking into consideration the consumer trends, relevant fashion of time, the scope and demands of every international market.

To evaluate an effective model of communication and monitoring in order to analyze the trends of the existing markets that includes domestic market, variety and innovations of the products of the company.

Internal Analysis: Brand Recognition

Value

The parent company, Moet Hennessy Louis Vuitton is one of the most famous, renowned and old fashion and apparel house. The company and the brand was founded about 150 years ago, and since….

Impact of Accounting Methods on Financial Statements

Accounting methods play a crucial role in the preparation of a company's financial statements. The choice of accounting method directly influences the recognition, measurement, and reporting of financial transactions and events. As a result, different accounting methods can significantly impact the presentation of a company's financial position and performance.

Income Statement

Revenue Recognition: The revenue recognition method determines when revenue is recorded. The cash basis method recognizes revenue only when cash is received, while the accrual basis method recognizes revenue when earned, regardless of cash receipt. This timing difference can affect the timing of revenue....

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2 Pages
Essay

Business

Revenue Recognition

Words: 655
Length: 2 Pages
Type: Essay

evenue recognition is a method by which one can determine when certain income can be recognized or considered as revenue. When we say "to recognize" we actually mean to…

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3 Pages
Essay

Accounting

Revenue Recognition Is Significant Because it Not

Words: 1024
Length: 3 Pages
Type: Essay

evenue recognition is significant because it not only defines to the leaders of the company that the product sold is doing well in its markets but also that the…

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4 Pages
Essay

Business

Revenue Recognition Revenue Is a Mode of

Words: 1155
Length: 4 Pages
Type: Essay

evenue ecognition evenue is a mode of taxation that is charged by the central governing authority for the purpose of generation income for the government. evenue is charged on various…

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5 Pages
Term Paper

Accounting

Revenue Recognition Issues Current Issues

Words: 1856
Length: 5 Pages
Type: Term Paper

Control environment: (i) Insistent accounting policies or practices. (ii) Demands from senior management to augment revenues and earnings (iii) Absence of involvement by the accounting or finance department…

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3 Pages
Essay

Accounting / Finance

Revenue Recognition Rule Changes

Words: 963
Length: 3 Pages
Type: Essay

AUS 2016-08 Analysis The Accounting Standards Update (ASU 2016-08) covers the topic "Revenues from Contracts with Customers". This move was made to bring the FASB standards more in line with…

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4 Pages
Essay

Accounting

Accounting Concepts Revenue Recognition Its Relevance and

Words: 1101
Length: 4 Pages
Type: Essay

Accounting Concepts evenue ecognition: Its elevance and Significance In the words of Kimmel, Weygandt and Kieso (2008), "the revenue recognition principle requires that companies recognize revenue in the accounting period…

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2 Pages
Essay

Business

Accounting Case Revenue Recognition Is a Significant

Words: 603
Length: 2 Pages
Type: Essay

Accounting Case Revenue recognition is a significant issue for several interrelated reasons. Appropriate guidelines for determining when revenue is recognized can keep companies from inflating their profits and boosting their…

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3 Pages
Case Study

Accounting / Finance

The 5 Step Model of Revenue Recognition

Words: 811
Length: 3 Pages
Type: Case Study

Jet Blue Case StudyWill the new revenue standard provide more decision-useful information than prior U.S. GAAP?Generally speaking, revenue recognition is the process of recording revenue in a company\\\'s accounting…

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4 Pages
Term Paper

Accounting

Guidance for Revenue and Expense

Words: 1072
Length: 4 Pages
Type: Term Paper

Expensing of Stock Options Expensing of stock options is a far more complicated issue. The Federal Accounting Standards oard (FAS) strongly recommends expensing of options and is trying to make…

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10 Pages
Term Paper

Business

Recognizing Revenue and Expenses in Legal Service Business

Words: 2711
Length: 10 Pages
Type: Term Paper

GAAP is a set of specific common guidelines, provided by the institutions such as the Financial Accounting Standards oard, the American Institute of Certified Public Accountants and the Securities…

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image
2 Pages
Term Paper

Finance

Cash Flows and Revenue

Words: 487
Length: 2 Pages
Type: Term Paper

Nike In its 2016 Form 10-K, on page 106, Nike notes its policy with respect to depreciation as follows: Depreciation is determined on a straight line basis for buildings and leasehold…

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11 Pages
Research Paper

Economics

Internal Revenue Code Section 751

Words: 3252
Length: 11 Pages
Type: Research Paper

" The determination for marketable security with respect to disproportionate distribution is accomplished by reducing the amount of marketable securities that is treated as money using the following steps: 1. The…

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3 Pages
Essay

Accounting

Internal Revenue Service's Use of Circular 230

Words: 1135
Length: 3 Pages
Type: Essay

Internal evenue Service's Use of Circular 230 to egulate Tax Preparers An oft repeated maxim in American history states sardonically that "in this world nothing can be said to…

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8 Pages
Essay

Economics

Capital Gain the Revenue Reconciliation

Words: 2401
Length: 8 Pages
Type: Essay

Furthermore, capital gains normally tend to be spread across a wider income scale than many believe. According to the IRS Individual Income Tax Returns, Preliminary Data, 1992 federal…

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7 Pages
SWOT

Not Specified

Internal Analysis Brand Recognition

Words: 1969
Length: 7 Pages
Type: SWOT

Louis Vuitton -- Case Study Key Issues To formulate a plan for the expansion of the brand into the international market. The planning and execution of strategies that would help on…

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