RSM220H1 Lecture Notes - Lecture 6: Financial Statement
Document Summary
Abi is a canadian public company that manufactures consumer electronics. Abi is preparing its inancial statements for the year of 2011. #1: appleberry gold revenue recogniion: relevant gaap: Ifrs provides alternatives: recognize full revenue right away vs. defer over contract life. Recognize if: risk and reward transfer, no coninuing involvement; measurable, collecible. Defer: coninuign sotware costs (part that sill must perform over service contraact, and measurability issue: implications of each alternaive: Defer: lower ni and eps, but defer to future periods (sill recognize some: with reference to case facts. Customers cannot return due to sotware problems (not really a coninuing involvement since cannot return the phone: your recommendaion: recognize. Issue #2: appleberry lightning revenue recogniion: relevant gaap: Recognize if: r&r transfer, no coninuing involvement, measurable, collecible. Otherwise, defer recogniion: implications of each alternaive: Not recognize: wait unil 2012 lower current ni and eps: with reference to case facts. Management bonus (management will do everything to meet the analysts" expectaions)
