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ANALYZING OPERATING ACTIVITIES, SIGIT BUDY PRASETYA (F0319132) - Coggle…
ANALYZING OPERATING
ACTIVITIES
Revenue
Recognition
Guidelines for Revenue Recognition
Uncertainty in Revenue Collection
Companies use a provision for doubtful (uncollectible) accounts to reflect uncertainty in
the collectibility of receivables from credit sales.
Revenue When Right of Return Exists
Price is substantially fixed or determinable at the sale date.
Buyer pays the seller or is obligated to pay the seller (not contingent on resale).
Buyer’s obligation to seller is unchanged in event of theft or damage to product.
Buyer has economic substance apart from the seller.
Franchise Revenues
Accounting standards for franchisors require that franchise fee revenue from franchis sales be recognized only when all material services or conditions relating to the sale are substantially performed or satisfied by the franchisor.
Product Financing Arrangements
Deferred
Charges
Research and Development
Accounting for Research and Development
Analyzing Research and Development
Computer Software Expenses
Development of computer software is a specialized activity that does not fit the usual expenditures of R&D activities. Development of software for marketing purposes is an ongoing activity leading directly to current or future revenues.
Exploration and Development Costs
in Extractive Industries
Accounting for Extractive Industries
Analysis Implications for Extractive Industries
Supplementary Employee
Benefits
Overview of Supplementary Employee Benefits
Employee Stock Options
Characteristics of Employee Stock Options
Economic Costs and Benefits of ESOs
Accounting and Reporting for ESOs
Disclosures of Employee Stock Options
Analyzing Employee Stock Options
Interest and
Taxes
Interest Computation
Interest Capitalization
Analyzing Interest
Income
Measurement
Income Concepts—A Recap
To recap, there are two alternative concepts of income: economic income and permanent
income
Measuring Accounting Income
Revenues (and gains) and expenses (and losses) are the two major components of
accounting income. This section discusses these two components.
Revenues and Gains
Revenues are earned inflows or prospective earned inflows of cash that arise from a
company’s ongoing business activities.
Gains are earned inflows or prospective earned inflows of cash arising from transactions and events unrelated to a company’s ongoing business activities.
Expenses and Losses
Expenses are incurred outflows, prospective outflows, or allocations of past outflows
of cash that arise from a company’s ongoing business operations.
Losses are decreases in a company’s net assets arising from peripheral or incidental operations of a company.
Alternative Income Classifications and Measures
Nonrecurring
Items
Discontinued Operations
Accounting for Discontinued Operations
Analyzing Discontinued Operations
Extraordinary Items
Infrequent occurrence
Unusual nature
Accounting Changes
Reporting of Accounting Changes
Analyzing Accounting Changes
Special Items
Asset Impairments
Restructuring Charges
SIGIT BUDY PRASETYA (F0319132)