Purchase Solution

Apple, Inc: Revenue Recognition

Not what you're looking for?

Ask Custom Question

Obtain Apple's annual report for the 2009 financial year. The filing date is: 2009-10-27. To make sure you have the correct file, I also provided the link: http://www.sec.gov/Archives/edgar/data/320193/000119312509214859/d10k.htm

Using the links provided, answer the following questions

Questions:
1. Refer to the revenue recognition discussion in Note 1 (page 62). In general when does Apple recognize revenue? Explain Apple's for revenue recognition criteria. Do they appear to be aligned with the revenue recognition criteria we discussed in class?
2. In the same footnote how did Apple recognize revenue for the sale of an iPhone? Record their recognition of revenue for the sale of an iPhone in the financial statements effect template. Now, obtain Apple' amended annual report (10-K/A) for the 2009 financial year.The filing date is: 2010-01-25. To make sure you have the correct file, I also provided the link: http://www.sec.gov/Archives/edgar/data/320193/000119312510012091/d10ka.htm
3. Refer to the revenue recognition discussion in Note 1 (page 30).What has changed compared to the old 10-K? Why do you think the changed occurred?
4. How does Apple now record the sale of an iPhone? Record their recognition of revenue for the sale of an IPhone under the new revenue recognition policy in the financial statements effect template.
5. What impact did the new accounting principle for revenue recognition have on Apple's balance sheet, income statement and statement of cash flow Did the new revenue recognition principle improve or weaken the company's gross margin for fiscal year 2009?

Purchase this Solution
Solution Summary

Impact of the new revenue recognition criteria and accounting principle for software related products on Apple's 2009 financial statements.

Solution Preview

Question 1
Software and software-related products - revenues from these products are accounted for "in accordance with the specific industry accounting guidance for software and software related transactions" (Apple, Inc., 2010, p. 62). This means that Apple recognizes the revenue when a sale has been constructively made - "hen persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable" (Apple, Inc., 2010, p. 62). For revenues from service and support contracts, revenue is prorated over the service coverage period.

These revenue recognition principles appear to be aligned with the revenue recognition criteria discussed in class.

Question 2
Revenue from an iPhone is accounted for using subscription accounting, which means that the sales ...

Purchase this Solution
Free BrainMass Quizzes
Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

View More Free Quizzes
Related BrainMass Solutions

  • Apple Inc. executive summary: current and total liabilities

    281502 Apple Inc. executive summary: current and total liabilities See attached file.

  • Ethics and Ahead of the Accounting Curve

    Retrieved April 1, 2012 frm http://www.cfo.com/article.cfm/14485618/1/c_2984368 The actions taken by Apple are consistent with revenue recognition rules, but are their financial results skewed?

  • Strategic Challenges Faces Apple

    Apple Inc and concentrate on the challenge that Apple is a U.S centric company.

  • Apple Inc SWOT analysis

    Brand Recognition: Apple Inc is one of the most respected brands and so it is strength. 2. Innovativeness: Apple has been able to launch excellent innovations like iPhone and so this is its strength. 3.

  • Revenue Recognition for Apple and Philips

    562987 Revenue Recognition for Apple and Philips Part I Why is revenue recognition a significant issue? How do we determine when revenues are recorded for accounting purposes? Explain the difference between a product and period expense.

  • Why is revenue recognition a significant issue?

    475872 Revenue Recognition Part I. - Why is revenue recognition a significant issue? How do we determine when revenues are recorded for accounting purposes? - Explain the difference between a product and period expense.

  • Apple's Organizational culture

    434074 Organizational Culture in the Workplace (Apple, Inc.) -Analyze the relationship between the design of Apple, Inc. and its organizational culture. (Approximately 400 words) One of the world's most innovation companies is Apple Inc.

  • Sales Revenue, Costs of Goods Sold, and Inventory Amounts

    542766 Sales Revenue, Costs of Goods Sold, and Inventory Amounts The following table presents sales revenue, cost of goods sold, and inventory amounts for three computer/electronics companies, Dell Inc., Hewlett-Packard Company, and Apple Inc.

  • Breakeven Analysis for Apple Computer's new product: Apple TV

    The sales revenue from 200,000 units is 200,000 * 250(selling price per unit) which is again $50,000,000/-. I have considered 'Apple TV' segment of Apple Inc. I have considered for the year 2008(Budgeting).

View More Related Solutions