Harvard Business Case:
June 4, 2002
The Intel Pentium Chip Controversy (A)
I have to make an accounting decision - how to recognize revenue of recalled product.
have to make an accounting decision - how to recognize revenue of recalled product. Intel 1994
There are three options that are being considered by Intel. According to the first option revenue is to be recognized on the defective product already sold, a provision is to be made for the estimated contingency losses for replacement of products sold and then write off unsold defective inventory. The second option proposed by the case is that the company can defer recognition of revenue until the defective products are actually replaced, and claim that the revenue has not been earned. The third option is ...
Intel Pentium Chip Controversy is discussed very comprehensively in this explanation.