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Chapter 1 - Solution Manual

20 investment tax credit recognition paragraph

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740-10-50-20 Investment Tax Credit Recognition Policy 50-20 Paragraph 740-10-25-46 identifies the deferral method and the flow-through method as acceptable methods of accounting for investment tax credits. Whichever method of accounting for the investment credit is adopted, it is essential that full disclosure be made of the method followed and amounts involved, when material. FASB ASC 1-4 SEC Comments a. Search revenue recognition customer payment and incentives 605-50
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24 Comments Made by SEC Observer at Emerging Issues Task Force (EITF) Meetings > > > SEC Observer Comment: Accounting for Consideration Given by a Vendor to a Customer (Including Reseller of the Vendor's Products) S99-1 The following is the text of SEC Observer Comment: Accounting for Consideration Given by a Vendor to a Customer (Including Reseller of the Vendor's Products). As it relates to consideration given by a vendor to a customer the SEC staff believes that the expense associated with a "free" product or service delivered at the time of sale of another product or service should be classified as cost of sales. b. Search debt with conversions and other options 470-20 Comments Made by SEC Observer at Emerging Issues Task Force (EITF) Meetings > > > SEC Observer Comment: Debt Exchangeable for the Stock of Another Entity S99-1 The following is the text of the SEC Observer Comment: Debt Exchangeable for the Stock of Another Entity . An issue has been discussed involving an enterprise that holds investments in common stock of other enterprises and issues debt securities that permit the holder to acquire a fixed number of shares of such common stock. These types of transactions are commonly affected through the sale of either debt with detachable warrants that can be exchanged for the stock investment or debt without detachable warrants (the debt itself must be exchanged for the stock investment - also referred to as "exchangeable" debt). Those debt issues differ from traditional warrants or convertible instruments because the traditional instruments involve exchanges for the equity securities of the issuer. There have been questions as to whether the exchangeable debt should be treated similar to traditional convertibles as specified in Subtopic 470-20 or whether the transaction requires separate accounting for the exchangeability feature. The SEC staff believes that Subtopic 470-20 does not apply to the accounting for debt that is exchangeable for the stock of another entity and therefore separation of the debt element and exchangeability feature is required c. Search software cost of sales and services 985-705 Comments Made by SEC Observer at Emerging Issues Task Force (EITF) Meetings > > > SEC Observer Comment: Accounting for the Film and Software Costs Associated with Developing Entertainment and Educational Software Products S99-1 The following is the text of SEC Observer Comment: Accounting for the Film and Software Costs Associated with Developing Entertainment and Educational Software Products.
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