Purchase Solution

Asset and Liability Recognition and Measurement

Not what you're looking for?

Ask Custom Question

Asset and liability recognition and measurement. After winning "America's Next Top Model" in 2006, Danielle Evans signed a contract with Ford Models, was named a spokes model for CoverGirl, and signed a contract for a photo spread in Elle magazine. Although Ford did not disclose the details of the contract, typical terms would provide for payments of $500,000 for each of the next three years. Assume that the present value of these payments is $1.2 million. At the time that Danielle signs the contract, Ford Models also provides her with a BMW M3 convertible sports car, valued at $70,000. How should Ford Models treat this contract at the time of signing?

Purchase this Solution

Solution Summary

An examination of a contract for a super model being either an asset or a liability recognition.

Solution Preview

Ford Models should treat the contract as a liability for accounting purposes. A liability is a current obligation because of a past event. In this ...

Purchase this Solution


Free BrainMass Quizzes
Learning Lean

This quiz will help you understand the basic concepts of Lean.

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.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Motivation

This tests some key elements of major motivation theories.

Operations Management

This quiz tests a student's knowledge about Operations Management