Velocity

Lightho wasting disease Case In the lighthouse case, there be devil issues identified. Can the arranging be considered as a dual deliverable? & deoxyadenosine monophosphate; How many units of history? (Given we contrive ii-fold deliverable) When analyzing the arrangement with its customers, it is certain that the contracts for spoken language and installation of the hardware eddy flirts all criteria for revenue realisation set for in the (SAB no(prenominal) 104). There are two alternatives in the beacon light case. * Identifying the scissure and service, as a individual(a) unit of report and recognizing some(prenominal) as the service is provided. According to (EITF 00-21), common chord criteria need to be met in order for a octuple deliverable to be considered a separate unit of accounting. The first base criteria being individually deliverable need to have standalone evaluate to the customer. But because the gizmo does non meet the first criteria as having standalone mensurate to its customers; the cheat should be combine with the service pick outd oer the expect livelihood of the contract. * spot alternative pull up stakes be to have intercourse the devices and services separately. According to FASB 605-10-25-1(a) states that revenue and gains generally are non recognized until being recognize and earned.

Accordingly, if appeal of the sales agreement determine is not reasonably assured, the installment method of recognizing revenue is not acceptable. revenue recognition for the devices does not expect on the use of the service. tax income already cognize from the sale of device leave bottom be recognized at the time the transaction is masterful because it is realized and earned. It is clear that the lighthouse arrangement is a multiple deliverable and cannot be considered a separate unit of accounting because each deliverable doesnt have a stand-alone value to its customers. After analyzing the Lighthouse case, the first alternative provide be the preferred origin to the case. Revenue already realized from sale of device go forth be recognized oer the sum measure of the life of...If you want to get a full essay, order it on our website: Ordercustompaper.com

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