Purchase Solution

How to judge the likelihood of revenue recognition problems.

Not what you're looking for?

Ask Custom Question

How would you judge whether a firm is likely to face revenue recognition problems?

Purchase this Solution
Solution Summary

What red flags would indicate possible revenue recognition problems for a firm?

Solution Preview

The more complicated the revenue reporting becomes, the more likely that revenue is to not be recognizable. Think of the corporation which re-invests into other stocks in other companies rather than return revenue to those investors visible to the first level. Major stockholders are often involved in the re-investment of their returns into other municiples and ...

Purchase this Solution
Free BrainMass Quizzes
Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Income Streams

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

Learning Lean

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

View More Free Quizzes
Related BrainMass Solutions

  • Evaluating sales staff: cash or accrual accounting method?

    204097 Is accrual-basis or cash-basis recognition of revenue more relevant to performance when evaluating the performance of a sales staff?

  • Ethics and Ahead of the Accounting Curve

    469395 Accounting ethics: Ahead of the accounting curve, too. Here is an interesting article on revenue recognition and how new pronouncements can affect the numbers.

  • The subject of revenue recognition is one that has been in

    Include your analysis of how the revenue recognition concepts we have studied are in conflict with how the company originally reported their revenue and why you believe the restatement is required.

  • Taxation Strategy - Prospective Purchasers

    Certainty - The tax rules should clearly specify when the tax is to be paid, how it is to be paid, and how the amount to be paid is to be determined.

  • significant management estimation

    These estimates more often relate to revenue recognition, valuation of assets and value of debtors. These have the potential of inflating the net profits of the company.

  • Issues in the timing of revenue recognition; irregular items

    These are the types of problems encountered with revenue recognition. The term 'subjective' would infer that the rules are not well-defined, but I would say it is the wide diversity of revenue types which complicate the timing of recognition.

  • Revenue Recognition for Penn Square Bank

    For offsetting ethical pressures to increase revenue recognition, the Penn Square Bank should have stuck to FASB principles. The GAAP should have been complied with and this would have helped avoid revenue recognition problems.

  • Revenue Recogntion

    This poses the questions: How do differences between the IFRS and US GAAP standards for revenue recognition impact multinational companies? Why are companies struggling to meet revenue recognition standards?

  • business entries: derive net income, journal entries

    A base line is needed to judge this year and although you could compare to industry averages, it is more effective to compare to the same company in the prior year.

View More Related Solutions