Tutorial Revenue and Share Based Payments1

Tutorial Revenue and Share Based Payments1 - Part A Basic...

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" THE UNIVERSITY OF NEW SOUTH WALES Australian School of Business ACCT 3563: Issues in Financial Reporting & Analysis #$%$&'$ #$()*&+,+)& -&. /0-1$ 2-3$. 4-56$&,3 TUTORIAL – Week 9 70+3 ,',)1+-893 8$-1&+&* ):;$(,+%$3 <=>? -1$ ,) '&.$13,-&. -&. [email protected]+&B 1. When to recognise revenue from sale of goods or from rendering of services 2. Accounting for construction contract activity using the percentage of completion method 3. The meaning of cash-settled and equity-settled share based payment transactions 4. Accounting for share options granted to employees including where there is a vesting period 5. The implications of agency theory to revenue/profit recognition C Part A. Basic Concepts A1. Questions from Deegan, Chapter 16 Question 1 When would it be appropriate to recognise revenue at completion of production rather than at point of sale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email protected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email protected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email protected]$Q - 3$88$1 6-5 1$,-+& ,0$ 8$*-8 ,+,8$ ,) ,0$ *)).3 3)8$85 ,) A1),$(, ,0$ ()88$(,-:+8+,5 )F ,0$ -6)'&, .'$K P& 3'(0 - (-3$Q +F ,0$ $&,+,5 0-3 ,1-&3F$11$. ,0$ 3+*&+F+(-&, 1+3M3 -&. 1$L-1.3 )F )L&$130+AQ ,0$ ,1-&3-(,+)& +3 - 3-8$ -&. 1$%$&'$ +3 1$()*&+3$.K G&),0$1 [email protected]$ )F -& $&,+,5 1$,-+&+&* )&85 -& +&3+*&+F+(-&, 1+3M )F )L&$130+A 6-5 :$ - 1$,-+8 3-8$ L0$& - 1$F'&. +3 )FF$1$. +F ,0$ ('3,)6$1 +3 &), 3-,+3F+$.K #$%$&'$ +& 3'(0 (-3$3 +3 1$()*&+3$. -, ,0$ ,+6$ )F 3-8$ A1)%+.$. ,0$ 3$88$1 (-& 1$8+-:85 $3,+6-,$ F','1$
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