会计学人大出版英文版第23版Chap005.ppt

IncomeMeasurementandProfitabilityAnalysis 5 Copyright 2011bytheMcGraw HillCompanies Inc Allrightsreserved McGraw Hill Irwin RealizationPrinciple Recordrevenuewhen Revenuesareinflowsorotherenhancementsofassetsofanentityorsettlementsofitsliabilities oracombinationofboth fromdeliveringorproducinggoods renderingservices orotheractivitiesthatconstitutetheentity songoingmajororcentraloperations SECStaffAccountingBulletinNo 101 StaffAccountingBulletinNo 101providesadditionalcriteriaforjudgingwhetherornottherealizationprincipleissatisfied Persuasiveevidenceofanarrangementexists Deliveryhasoccurredorserviceshavebeenperformed Theseller spricetothebuyerisfixedordeterminable Collectibilityisreasonablyassured RealizationPrinciple Revenuerecognitionisoftentiedtodeliveryoftheproductfromthesellertothebuyer U S GAAPvs IFRS Earningsprocessiscompleteorvirtuallycomplete Reasonablecertaintyastothecollectibilityoftheassettobereceived RevenuerecognitioncriteriaforU S GAAPandIFRSinclude Revenueandcostscanbemeasuredreliably Probablethateconomicbenefitswillflowtotheseller Riskandrewardsaretransferredtobuyerandsellerdoesnotmanageorcontrolthegoods Stageofcompletioncanbemeasuredreliably RevenueRecognitionatDelivery Whentheproductorservicehasbeendeliveredtothecustomerandcashhasbeenreceivedorareceivablehasbeengeneratedthathasreasonableassuranceofcollectibility RecognizeRevenue RevenueRecognitionAfterDelivery InstallmentSalesMethodCostRecoveryMethod Whenweareunabletomakereasonableestimatesofuncollectibleamountsorcustomerreturnsofproducts wedelayrecognizingrevenuefromthesaleuntiltheuncertaintyhasbeenresolved InstallmentSalesMethod OnNovember1 2011 theBelmontCorporation arealestatedeveloper soldatractoflandfor 800 000 Thesalesagreementrequiresthecustomertomakefourequalannualpaymentsof 200 000plusinterestoneachNovember1 beginningNovember1 2011 Thelandcost 560 000todevelop Thecompany sfiscalyearendsonDecember31 GrossProfit 240 000 800 000 30 InstallmentSalesMethod CostRecoveryMethod OnNovember1 2011 theBelmontCorporation arealestatedeveloper soldatractoflandfor 800 000 Thesalesagreementrequiresthecustomertomakefourequalannualpaymentsof 200 000plusinterestoneachNovember1 beginningNovember1 2011 Thelandcost 560 000todevelop Thecompany sfiscalyearendsonDecember31 CostRecoveryMethod RightofReturn Inmostsituations eventhoughtherighttoreturnmerchandiseexists revenuesandexpensescanbeappropriatelyrecognizedatpointofdelivery Estimatethereturns ReducebothSalesandCostofGoodsSold ConsignmentSales Sometimesacompanyarrangesforanothercompanytosellitsproductunderconsignment Becausetheconsignorretainstherisksandrewardsofownershipoftheproductandtitledoesnotpasstotheconsignee theconsignordoesnotrecordasaleuntiltheconsigneesellsthegoodsandtitlepassestotheeventualcustomer RevenueRecognitionPriortoDelivery CompletedContractMethod Percentage of CompletionMethod Long termContracts CompletedContractandPercentage of CompletionMethodsCompared AccountingfortheCostofConstructionandAccountsReceivable Withboththecompletedcontractandpercentage of completionmethods allcostsofconstructionarerecordedinanassetaccountcalledconstructioninprogress GrossProfitRecognition GeneralApproach Inbothmethodsthesameamountsofrevenue cost andgrossprofitarerecognized Inbothmethodsweaddgrossprofittotheconstructioninprogressasset GrossProfitRecognition GeneralApproach Thesamejournalentryisrecordedtocloseoutthebillingsonconstructioncontractandconstructioninprogressaccountsunderthecompletedcontractandpercentage of completionmethods TimingofGrossProfitRecognitionUndertheCompletedContractMethod Underthecompletedcontractmethod allrevenuesandexpensesrelatedtotheprojectarerecognizedwhenthecontractiscompleted TimingofGrossProfitRecognitionUnderthePercentage of CompletionMethod Usingthepercentage of completionmethod werecognizeaportionoftheestimatedgrossprofiteachperiodbasedonprogresstodate Wedeterminetheamountofgrossprofitrecognizedineachperiodusingthefollowinglogic Percentage of CompletionMethodAllocationofGrossProfit Percentage of CompletionMethodAllocationofGrossProfit Noticethatthegrossprofitrecognizedineachperiodisaddedtotheconstructioninprogressaccount Percentage of CompletionMethodAllocationofGrossProfit Theincomestatementforeachyearwillreporttheappropriaterevenueandcostofconstructionamounts IncomeRecognition Thesametotalamountofprofitorlossisrecognizedunderboththecompletedcontractandthepercentage of completionmethods butthetimingofrecognitiondiffers BalanceSheetRecognition Billingsonconstructioncontractaresubtractedfromconstructioninprogresstodeterminebalancesheetpresentation BalanceSheetRecognition Thebalanceintheconstructioninprogressaccountdiffersbetweenmethodsbecauseoftheearliergrossprofitrecognitionthatoccursunderthepercentage of completionmethod Long termContractLosses U S GAAPvs IFRS Requirespercentage of completionwhenreliableestimatescanbemade Requirescompletedcontractmethodwhenreliableestimatescan tbemade TherearesimilaritiesanddifferencesbetweenIFRSandU S GAAPwhenconsideringrevenuerecognitionforlong termconstructioncontracts Requirespercentage of completionwhenreliableestimatescanbemade Requirescostrecoverymethodwhenreliableestimatescan tbemade U S GAAPvs IFRS Noticethatrevenuerecognitionoccursearlierunderthecostrecoverymethodthanunderthecompletedcontractmethod butgrossprofitrecognitionoccursattheendofthecontractforbothmethods SoftwareandOtherMultiple DeliverableArrangements Ifasaleincludesmultipleelements software futureupgrades postcontractcustomersupport etc therevenueshouldbeallocatedtotheelementsthathavestand alonevalue e g aren tcontingent Otherwise deferrevenuerecognitionuntilthelastitemdelivered Software baseallocationonVSOEOther canuseestimatedsellingprices Thisincludestangibleproductsthatcontainessentialsoftware U S GAAPvs IFRS Revenueshouldbeallocatedtothevariouselementsbasedonthestand alonesellingpricesoftheindividualelements Thesecanbeestimatedfornon softwarearrangementsifVSOEisnotavailable buthavetouseVSOEforsoftwarearrangements IFRScontainsverylittleguidanceaboutmultiple deliverablearrangements Maybenecessarytoapplytherecognitioncriteriatotheseparatelyidentifiablecomponentsofasingletransaction Allocationoftotalrevenuetoindividualcomponentsarebasedonfairvalue FranchiseSales U S GAAPvs IFRS Hasover100revenue relatedstandardsthatsometimescontradicteachother TheFASBandIASBarecurrentlyworkingonanew comprehensiveapproachtorevenuerecognition Hastwoprimarystandardsthatalsosometimescontradicteachotherandthatdon tofferguidanceinsomeimportantareas likemultipledeliverables TheBoardsappearcommittedtoimprovingaccountinginthisarea ActivityRatios Wheneveraratiodividesanincomestatementbalancebyabalancesheetbalance theaveragefortheyearisusedinthedenominator ProfitabilityRatios ReturnonEquityKeyComponentsProfitabilityActivityFinancialLeverage ThisiscalledtheDuPontframeworkbecausetheDuPontCompanywasapioneerinemphasizingthisrelationship DuPontFramework TheDuPont