tailieunhanh - The financial numbers game detecting creative accounting practices phần 6

Tài liệu tham khảo trước đó kêu gọi của Chủ tịch SEC để làm rõ về định nghĩa của trách nhiệm pháp lý là một trường hợp tại điểm. SEC cũng là công cụ trong việc thúc đẩy các FASB phát triển các yêu cầu kế toán và công bố tài chính phái sinh | The Financial Numbers Game The SEC has clarified and tightened the requirements for revenue recognition. To recognize revenue there must be persuasive evidence of an arrangement delivery has occurred or services have been rendered the seller s price to the buyer is fixed or determinable and collectibility is reasonably assured. While technically fulfilling the criteria for revenue recognition channel stuffing where deep discounts are offered to encourage orders that are uneconomic from the buyer s perspective results in the recognition of revenue that is not sustainable. Side letters sometimes are used to surreptitiously negate the terms of a sale. Revenue should not be recognized in such cases. Under specific criteria revenue that is subject to a right of return can be recognized. It is important for the estimated amount of any return to be deducted from the revenue amount reported. Related-party revenue when a sale or service transaction is conducted with an entity over which the selling company has influence must be clearly disclosed. Disclosure permits the reader to form an opinion as to the sustainability of the revenue recognized. Very specific criteria must be met before revenue can be recognized in advance of shipment. These criteria guide the recognition of revenue in bill-and-hold transactions. Among the criteria is the stipulation that bill-and-hold transactions must be arranged at the request of the buyer. Service fees cannot be recognized until the related services are provided. Contract accounting is employed when an extended period is required for completion of a product or service. Under contract accounting there are two methods of reporting revenue. Under the percentage-of-completion method revenue is recognized as progress is made toward completion. Under the completed-contract method revenue is recognized at completion. In detecting premature or fictitious revenue the following points are important 1. The revenue recognition footnote contains .