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SEC Accounting and Auditing Enforcement Release (AAER) No. 108 specifies certain conditions or criteria that a bill and hold transaction of a public company should meet in order to qualify for revenue recognition. The AAER also specifies certain factors that should be considered in evaluating whether a bill and hold transaction meets the requirements for revenue recognition. AAER No. 108 state that a "bill and hold" transaction should meet the following conditions:•The risks of ownership must have passed to the buyer.•The customer must have made a fixed commitment to purchase the goods, preferably reflected in written documentation.•The buyer, not the seller, must request that the transaction be on a bill and hold basis, The buyer must have a substantial business purpose for ordering the goods on a bill and hold basis.•There must be a fixed schedule for delivery of the goods. The date for delivery must be reasonable and must be consistent with the buyer's business purpose (e.g., storage periods are customary in the industry).•The seller must not have retained any specific performance obligations such that the earning process is not complete.•The ordered goods must have been segregated from the seller's inventory and not be subject to being used to fill other orders.•The equipment must be complete and ready for shipment.Required:1.Discuss why a buyer may want to order on a bill and hold basis. Why might a seller want to classify an order as bill and hold if it does not meet the above criteria?2.Identify and discuss the reliability of the types of evidence an auditor would need to determine whether each condition cited above was met for a bill and hold transaction.
In 2009, a GenX, Inc. spent $500,000 on training and capitalized the entire amount, intending to write it off over 5 years. This accounting treatment is:
What is the EPS for the company if it has a P/E ratio of 20? What is the book value of the company if the price-to-book ratio is 1.5 and it has 100,000 shares of stock outstanding?
Under the reporting model required by GASB Statement 34, fund statements are required for governmental, proprietary, and fiduciary funds. Government-wide statements include the Statement of Net Assets and Statement of Activities. Answer the follow..
Furthermore,the penalties and interest charged on delinquent taxes exceed the interest charges on the tax anticipation notes.
Explain the rules for marital status and community property income. Her address is 500 Elizabeth Street, Brownsville, Texas 78520.
On February 1,2014, Razorback Corporation decides to transfer its available-for-sale securities to the trading category. These securities had been purchased for $9,400 early in 2013 and had a fair value of $11,700 on December 31, 2013. On Febru..
Sable sells a passive activity with an adjusted basis of $245,000 for $305,000. Suspended losses attributable to this property total $45,000. The total gain and the taxable gain are:
However, the coststructure has reversed and now fixed costs make up the majority of total manufacturing costs. What caused this to happen? What would explain the drastic change in cost structure?
John Fillmore's lifelong dream is to own his own fishing boat to use in his retirement. Jack has recently come into an inheritance of $400,000.
Wahr Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. At the beginning of the most recently completed year
Raymond provides the following information related to assets used in a trade or business which have been sold in 2011. All assets have been held for over one year.
Liquidity and Asset Management Ratios Oasis Products, Inc. has current liabilities = $10.2 million, current ratio = 1.70 times, inventory turnover ratio = 12.2 times, average collection period = 22 days, and sales = $102 million.
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