Explain how zynga records revenue from the sale of virtual

Assignment Help Corporate Finance

Reference no: EM133486344

Case Study: Zynga Inc. (ZNGA) is the world's leading provider of social game services with 240 millionmonthly users in over 175 countries. Zynga's leading games include CityVille, Zynga Poker,FarmVille, CastleVille, FrontierVille, Mafia Wars, Words with Friends and Draw Something.Facebook is the primary distributor, marketer and payment platform for the company's games,although the games are available on other social networks and through mobile applications.Zynga went public in December 2011 and is headquartered in San Francisco, CA.

Question 1) Does Zynga charge its customers to play the company's games? How does Zynga earn revenue?

Question 2) In your own words, explain how Zynga records revenue from the sale of virtual goods?

Question 3a) Do you think Zynga's method for accounting for virtual goods is appropriate? Why or why not?

Question 3b) What other information would you like Zynga to provide in order to better assess whether the accounting treatment for virtual goods is appropriate

Question 4a) Zynga notes that a change in the estimated average playing period resulted in an increase inrevenue of $53.9 million in 2011 and an offsetting reduction in revenue in 2012. What musthave happened to the average playing period (i.e., did it increase or decrease)? What doesthat imply about the nature of Zynga's business?

Question 4b) What net income would Zynga have reported in 2011 had the company not made this change?

Reference no: EM133486344

Questions Cloud

Identify an activity that is done by healthcare professional : Identify an activity that is done by healthcare professional in any healthcare setting. Assess ergonomic characteristics that are associated with this activity.

Why is the constitution called a living document : Do you believe that the Constitution has as much significance today as it did when it was originally drafted? Why or why not?

Elementary and secondary act of 1965 : What were the implications for teachers due to the elementary and secondary act of 1965? what were the implications for teachers due to the act of 1973?

Why do you see this as major challenge : Why do you see this as major challenge? What do you believe are the best ways to resolve this major challenge? Why so? How can security/loss prevention

Explain how zynga records revenue from the sale of virtual : Does Zynga charge its customers to play the company's games? How does Zynga earn revenue? explain how Zynga records revenue from the sale of virtual goods?

Identify key barriers to effective communication : Identify key barriers to effective communication. Indicate the methods needed to improve communication regarding the needed changes

Consider what cultural aspects you might fold : Consider what cultural aspects you might fold in that reflect our current worries and ethics and priorities in our own culture right now.

Identify how other investigative methods could have : Identify how other investigative methods could have possibly been used to solve this crime

What are main purposes of the codes of ethics : What are the main purposes of the codes of ethics/standards of practice for helping professionals?

User Account

All Pages