As indicated in the definition of contingency, the term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses. The Contingencies Topic uses the terms probable, reasonably possible, and remote to identify three areas within that range.” Moreover, ASC 450-20-25-2 shows that “An estimated loss from a loss contingency shall be accrued by a charge to income if both of the following conditions are met: a. Information available before the financial statements are issued or are available to be issued indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements. Date of the financial statements means the end of the most recent accounting period for which financial statements are being presented. It is implicit in this condition that it must be probable that one or more future events will occur confirming the fact of the loss.
General Priciple – Performance are only recorded when the target is proable to be acheived Sooner and Later Inc On January 1, 2006, Sooner or Later Inc. granted 1,000 “at-the-money” employee stock options (i.e., the exercise price was equal to the stock price on the grant date). To align the compensation of the employees with the financial performance of the company, the award will vest only if cumulative revenue over the following three-year reporting period is greater than $10 million and the employees are still employed by Sooner or Later. As of the date of the grant, management believes it is probable that the company will achieve cumulative revenue in excess of $10 million over the following threeyear period. Each award has a grant-date fair value of $9. Sooner or Later’s valuation professionals have indicated that if the revenue target was factored into the fair value assessment, the grant-date fair value would be $6.
Hoang Thi Thanh Ha – 13200154 Case 13-1 Refer-a-Friend Program 1. How should the $25 Referral Credit be record in Runway’s Income Statement – as a reduction of revenue or as a marketing expense? By implementing the “Refer-a-Friend Program” Runway Discount is taking the proper steps to increase its sales and its customer base. With the application of this program, however, there are some additional procedures that must be followed when recording transactions involving the $25 Referral Credit. According to ASC 605-50-45-1 Revenue Recognition, a vendor may give a customer a sales incentive or other consideration.
Be able to identify relevant costs and benefits; understand the decision rule b. Prepare a financial
1.0 points) 3. Describe two of your long-term financial goals, and explain why these goals are important to you. List at least three steps that might help you accomplish this goal. (4-6 sentences. 2.0 points) 4.
In the given scenario; if Company A determined that marginal revenue (MR) is greater than marginal cost (MC) the action that they should take to reach profit maximization is to continue manufacturing additional units of widgets until the marginal revenue is equal to marginal cost. Using the information provided in the data table, when firm has reached the output quantity of seven widgets their marginal revenue is still larger than their marginal cost by twenty dollars. As a result of increasing the quantity of widgets produced to eight the marginal revenue and marginal cost are now equal to zero therefore maximizing Company A’s
(2-4 sentences. 1.0 points) Describe two of your long-term financial goals, and explain why these goals are important to you. List at least three steps that might help you accomplish this goal. (4-6 sentences. 2.0 points) Describe an example of a common financial resource, an expense, and a debt.
For acquired assets that are not a business, they shall be accounted for as an asset acquisition. The four components of the acquisition method include: 1) identify the acquirer, 2) identify the acquisition date, 3) recognizing and
Line item budgeting provides feedback on the extent of revenues and expense living up to the anticipated revenues and expense planning; it relates process to inputs and answers the question, Are agency and programs in keeping with approved budgets? While performance budgeting systems relate outputs to inputs and answers the question, How efficient are the agency's programs? The feedback from performance budgeting systems provides programmatic and financial performance feedback of the extent of the agency’s programs produces outputs, quality, and outcomes and their
What can we say about the income for a customer that has a credit balance of $10,000? Explain your answer. In an attempt to improve the model, we attempt to do a multiple regression model predicting income based on creditbalance, years, and size. 11. Using MINITAB, run the multiple regression analysis using the variables creditbalance, years, and size to predict income.