Zumiez Inc. Case Study

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Grace Amankwe Compliance Project – Part II ACC 655 Zumiez Inc. Analysis of Compliance Zumiez Inc. recognizes revenue of in store sales at the time of purchase and recognizes revenue of online sales upon estimated delivery to their customer and shipping revenues are within net sales reported. Taxes collected from their customers are recorded on a net basis and the sale of a gift card is recorded as a current liability and then recognized as revenue when the customer redeems the gift card. Revenue is recorded net of estimated and actual sales returns and deductions for promotions. Zumiez Inc. also accrues for estimated sales returns by customers based on historical sales return results. The allowance for sales returns at January 29,…show more content…
Financial statements for each individual prior period presented shall be adjusted to reflect correction of the period-specific effects of the error. Zumiez’s ability to determine the materiality of the error also falls in line with the rules and regulations set forth. In FASB 250-10-45-27, determining materiality for the purpose of reporting the correction of an error, amounts shall be related to the estimated income for the full fiscal year and also to the effect on the trend of earnings. Changes that are material with respect to an interim period but not material with respect to the estimated income for the full fiscal year or to the trend of earnings shall be separately disclosed in the interim…show more content…
All components of other comprehensive income. FASB 220-10-45-1B states: An entity reporting comprehensive income in two separate but consecutive statements shall present the following: • a. Components of and the total for net income in the statement of net income • b. Components of and the total for other comprehensive income as well as a total for comprehensive income in the statement of other comprehensive income, which shall be presented immediately after the statement of net income. A reporting entity may begin the second statement with net income. Although Zumiez states the total amount of comprehensive income, they fail to break out the components of their total anywhere in their financial statements. SFAS No. 130 requires the disclosure of comprehensive income and discusses how to report and disclose comprehensive income and its components, including net income. However, it does not specify when to recognize or how to measure the items that make up comprehensive income. In reporting comprehensive income, companies are required to use a gross disclosure technique for classifications related to items of other comprehensive income other than minimum pension liability adjustments. For those classifications, reclassification adjustments must be disclosed separate from other changes in the balances of those items so that the total change is disclosed as two amounts.

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