(Five-Step Revenue Process) Team 1
Revenue is recognized based on a five-step process that is applied to a company's revenue
Briefly describe the five-step process.
The process is shown well on page 104
A- The FASB has 3 primary goals in developing the codification:
1. Simplify user access by codifying all authoritative U.S. GAAPs in one spot.
2. Ensure that codified content accurately represented authoritative U.S. GAAPs as of July 1,2009.
Case 13-4 Lease Classifications
a) If at its inception the lease meets any one of the following for criteria:
1. The lees transfers ownership of the property to the lessee by the end of the lease term.
2. The lease contains a bargain purch
a. Debt securities classified as trading or available for sale are to be treated in the same manner as
equity securities that are similarly classified. Securities bought for the purpose of selling in the near
future are classifie
Chapter 7 important
Case 7-5 The Statement of Cash Flows
Presenting information on cash flows has become an important part of financial reporting.
a. What goals are attempted to be accomplished by the presentation of cash flow infor
Case 13-1 Capital versus Operating Leases
By Molly Quach
Daggar Corp (capitalizes lease)
5 payments, $20,000 each, present value of an annuity due at 8% = 4.3121
$20,000 x 4.3121 = $86,242 present value of payments
Depreciation Expense = $86,242/5 = $17,2
a. The land will be reported at fair value ($100,000) on the income statement as revenue
and also on the balance sheet as asset.
b. (i) FASBs position is consistent with the conceptual frameworks qualitative criterion
relevance. When valuing
Property, Plant and Equipment generally represent a material portion of the total assets of most
companies. Accounting for the acquisition and use of such assets is therefore an important part of the
Reporting Bond Liabilities
a. Distinguish between nominal and effective interest rates
- The nominal interest rate is quite simply the stated interest rate of a given bond. The
effective rate interest is an investment's an