Abstract This paper explains to a manufacturing company how each of the following recommendations for recognizing revenue and expenses will assist the organization in meeting its goals. The paper also explains why alternative revenue recognition methods were not chosen.
1) Revenue Recognition Methods
2) Expensing Recognition Methods
3) Expensing of Stock Options
From the Paper "There are two different ways to recognize revenues. One way is the accrual accounting method. The other way to recognize revenues involves cash basis accounting. Al Rosen writes, in "Canadian Business", that under the accrual basis for accounting, revenue is recognized when either or both of the following conditions are met: the revenue is substantially earned or the revenue is realized or realizable. In other words, revenue is earned when products are delivered or services are provided. Under the accrual basis for accounting expenses must be..."
Abstract The issue of revenue recognition may seem, at first thought, trivial relative to the other areas of financial accounting. However, the way in which a company chooses to recognize its revenue can have a significant impact on the company's financial statements and may lead to an overstatement or understatement of revenues. The paper shows that with the increasing popularity of the internet, the issue of revenue recognition is becoming even more important as hundreds of small companies are now issuing stock and attracting small investors who might not have participated in the stock market previously. In addition, there is increased competition for funds among publicly held companies and being able to show higher revenues, rather than lower, can help a company both maintain a higher stock price and attract new investors. This research examines one Internet company, eBay and its approach to revenue recognition.
From the Paper "The most basic explanation of eBay is that it provides an on-line auction service. Sellers (who must register with the site) list items for sale and, optionally, a minimum price (as well as a reserve price below which they will not sell the item). Buyers have a predefined period of time during which they may bid on items after which eBay validates if a bid exceeded the minimum price and the reserve price (if a reserve price has been set). If the sale was successful according to these criteria, eBay notifies the buyer and seller through e-mail and they consummate the sale (arranging for shipment and payment) between them. At the time of the e-mail notification, eBay's involvement in the transaction is concluded. The site is not responsible for either payment or shipping (1999 Annual Report, 2000, p. 6)."
Abstract This paper explains that, since no broad norms on revenue recognition exist, there is a considerable gap between the broad conceptual guidance in the Financial Accounting Standard Board - FASB Concepts Statements and the exhaustive guidance in the authoritative literature. The author points out that more than 50% of the frauds in financial reporting among the U.S. public companies involve overstating the revenue. The paper stresses that, because users in this modern era want instantaneous data in formats which permit rapid access and analysis to assist in the better decisions; companies require trustworthy on-line, real-time reporting that is characterized by (i) dependable systems (ii) usual methods of disseminating information. (iii) corporate accountability, inclusive of management integrity and concrete enterprise risk management and (iv) comprehensible disclosures and information.
Table of Contents
Current Issues and Actions Related to Revenue Recognition
Working Norms for Recognition of Revenues Definition of Revenues Problems Related to Revenue Recognition
My Thoughts and Opinions
Control Environment
Matters Needing Special Consideration
From the Paper "As regards the items which must be included or excluded from the description of revenues, a consensus was made that - (i) a reporting body must not recognize revenues for the performance by third parties of its responsibility to work or extend services to customers in case those responsibilities are officially assumed by those third parties. (ii) In case of all other situations, a reporting body must recognize revenues for the performance by third parties of its responsibility to do work. (iii) Production will result in effecting a component of wide-ranging income. (iv) Non-reciprocal transfers received must not be excluded from revenues and must not be shown as a distinct line item in the income statement. (v) A reporting body must at the introductory stages measure its obligations for performance guarantees at their fair values and must recognize revenues as a result of their satisfactory performance or completion of those guarantees."
Abstract This paper discusses the revenues and funding for the city of Charlotte. It discusses the sources of the government's funding and then looks at why the proprietary funds for the city of Charlotte have deficits that have not supported the costs associated with those funds. The paper finally looks at the revenue policy and community values for the city of Charlotte.
Table of Contents:
Revenue: Governmental, Proprietary, and Fiduciary
Restrictions
Receipt of Revenues Revenue Projections
Revenue Policy and Community Values
Conclusion
From the Paper "The research indicates that revenues for the city are used to support proprietary, governmental and fiduciary funds. In relation to proprietary and governmental funds, these revenues have not been sufficient over the long term to support all of the programs and services that the have been determined to be essential for the people of Charlotte. However, there has also bee a large growth in the diverse population of Charlotte, which has created additional revenues and provide for a surplus fund that is often used to balance the budget or address community need when appropriate. It is this surplus fund that could be used in part to provide for the MWDBE program, which would serve to support the diverse community that Charlotte views as integral to its continued growth."
A comprehensive analysis of changes in sales revenues and profits in the U.S. pharmaceutical industry from 1980-2000. It includes several original graphs based on relevant statistics.
Abstract This paper analyzes how changes in sales revenues and profits in the pharmaceutical industry are related to the business cycle with regards to the gross domestic product, consumer price index, and unemployment rate from 1980-2000. The following guidelines were followed: 1) analysis of the pharmaceutical industry and finding revenues and profits from the period of 1980-2000; 2) how revenues and profits in the industry varied over the period 1980-2000; 3) how the business cycle behaved over the period of 1980-2000; 4) variations in revenues and profits with swings in the business cycle and the juxtaposition of industry revenues and profits against the business cycle;and 5) strategies recommended for firms in the industry dealing with the business cycle. A summary is provided in the conclusion. Several original graphs are also included.
From the Paper "One expert suggests the modern pharmaceutical industry began in the 19th century with the discovery of highly active medicinal compounds that could most efficiently be manufactured on a large scale. As these compounds replaced herbal medicines of earlier times, the occurrence and severity of such diseases as pernicious anemia, rheumatic fever, typhoid fever, lobar pneumonia, poliomyelitis, syphilis, and tuberculosis were greatly reduced. Pharmaceutical industry research has greatly aided medical progress; of the 66 most valuable drugs introduced since aspirin in 1899, 57 were discovered and then produced in industrial laboratories (Atherton, 2002). Today, the pharmaceutical industry is comprised of the processes, operations, and organizations engaged in development and manufacture of drugs and medications (Atherton, 2002). In the U.S., the pharmaceutical industry is followed by the Standard & Poor 500 (S&P 500)."
Abstract This paper discusses revenue maximization by understanding the concepts of yield management and revenue management. The paper then takes a look at how these concepts can make significant contributions to the airline's bottom line.
Overview:
Abstract
Yield Management
Revenue Management
In Defense of Yield and Revenue Management
The Future of Yield and Revenue Management
Conclusion
From the Paper "Profit motives aside, the airlines do in fact serve the public interest; it is because of airlines' investments in material and human resources that the average person can travel from one place to another in a way that is far superior to any other mode of transportation in terms of time saved and convenience, and despite rumors to the contrary, in fact quite safely. This rapid transportation of people and goods improves the quality of life and efficiency of everyone, allowing business, political and interpersonal relationships to prosper as well as delivery of critical items when they are needed and where they are needed. Therefore, the airlines do in fact have every right to charge what they choose for their services, keeping in mind however that the consumer has the right to refuse to pay the set price. In this way, predatory pricing airlines will be forced out of the marketplace by the time tested forces of supply and demand."
A research analysis to discover which tools healthcare organizations and practitioners may use to increase revenue streams while facing rising costs and an increasingly aging population relying on Medicare and Medicaid.
Abstract The paper reviews the trends, innovations and future of finances, revenue streams and investments in the healthcare industry. In doing so the paper proposes several choices or alternative sources of revenues for hospitals treating an ever-increasing number of patients that rely on Medicare and Medicaid for insurance. The paper comments that at the time of this study, most hospitals fell short of revenue goals because Medicare and Medicaid did not provide adequate compensation to meet the needs of the aging population.
Outline:
Introduction
Purpose of the Study
Overview Medicare & Medicaid
Background and Review of the Problem
Tools Used in the Past to Generate Revenue Tools That May Save Money
Other Sources of Funding
How to Protect Revenue Streams
From the Paper "Unfortunately, while these programs offer some assistance to patients, Medicare and Medicaid often fall far short of need when the time comes to pay for lengthy hospital stays. Legislation in recent years has proposed cutting the budget for Medicare and Medicaid in the past, something that would only increase the problem hospitals and other healthcare facilities have when collecting revenues for treatments offered to the Medicare and Medicaid population (AHA, 2006). Many hospitals and other facilities have gone as far as denying treatment because they cannot keep up with costs associated with caring for those without secondary insurance."
Abstract This paper presents the different issues concerning the revenue and expense recognition, as identified by the Financial Accounting Standards Board in several documents over the past couple of years. The paper provides the theoretical base on which a discussion is developed around the type of revenue and expense, as related to a company's specific area of expertise. The paper explains and summarizes the findings for the company's president, with a series of conclusions thereafter.
Outline
Introduction
Revenue and Expense Recognition
Report to the Company's President
Conclusion
From the Paper "GAAP is a set of specific common guidelines, provided by the institutions such as the Financial Accounting Standards Board, the American Institute of Certified Public Accountants and the Securities and Exchange Commission, about "acceptable accounting practices" . These acceptable practices should not necessarily be regarded as a set of ground rules. In fact, it is a common denominator, useful when foreign firms, especially auditing companies, proceed to financial verifications. The GAAP provide for an easier task from the auditing companies and anybody else who interprets the financial statements."
Abstract This paper expands on the method of comparing marginal cost and marginal revenue to yield maximum profits for businesses. It shows the relationship between the comparison of cost and revenue and maximized profit.
Outline
Abstract
Introduction
Comparing Cost and Revenue to Achieve Maximum Profits
Conclusion
From the Paper "It is the aim of every businessman to increase his profits to such an extent where he is acquiring maximum profits. In the field of economics, profit maximization is a process adopted by a firm to determine the price and the output level of the produce which would generate the greatest profit. There are many approaches to this of which one of them is the comparison of marginal revenue and marginal cost. Cost and revenue comparison to maximize profit is used to calculate whether an additional unit of product or service being sold would generate increased profits or would it be a bad idea altogether. It is based on the fact that total profit in a perfect market reaches its maximum point where marginal revenue equals marginal cost."
Abstract This paper will answer the question: Do Lottery Revenues increase scholastic budgets or just replace general revenues that were once set aside for education?
Abstract This research proposal takes a look at a scenario whereby a physician's office is informed of a forecasted drop in annual revenue. The paper illustrates the changes in organizational structure that will be proposed to the Board in order to address this reduction in revenue. The paper also discusses the rationale for these proposed changes.
From the Paper "The 15% decrease in revenue might possibly be addressed through seeking alternative staffing options. The possibility of adding physicians to the organization was researched and in the process of that research the work entitled: "The Nurse Practitioner in Managed Care Organizations" was reviewed and revealed was the practicality of hiring a Nurse Practitioner. Healthcare quality and cost-effectiveness are essential goals of a managed care organization. Reduction of overhead in the physician's office may be accomplished through the hiring of Nurse Practitioners thereby increasing the caseload of the physician office yet without burdening the practice with the salary of additional physicians. In the article entitled: "The Nurse Practitioner in Managed Care Organizations" it is stated that: "In terms of practice revenue, NPs cost 40% less than physicians and were particularly cost-effective in preventive care with their expertise in counseling, patient/client education and case management (Appleby, 1995; as cited by AANP, 1997) Nurse Practitioners at the Community Health Services which is sponsored by Vanderbilt is stated to have: "delivered health care at 23% below the average cost of other primary care providers with a 21% reduction in hospital inpatient rates." (AANP, 1997) The American Association of Nurse Practitioners report states that: "Accessible primary care with an emphasis on disease prevention and health promotion is a key component of reduced health care costs. (Hardy-Havens & Evans, 1995; Hardy-Havens, et al, 1996)"
Abstract The paper uses the current organic food sector, particularly organically grown fruits and vegetables, to illustrate the strategies that can be implemented in order to increase sales revenues. The paper describes the organic food industry, its product and market features, the price elasticity of organic foods and the effects of consumers' behavior. The paper then analyzes the advantages and disadvantages of different strategies, namely, increasing the price, reducing the cost, enlarging the customer palette and diversifying the product palette.
Outline:
Overview
Companies' state
Product Features
Market Features
Price Elasticity
Consumers' Behavior
Proposed strategies to increase revenue sales
From the Paper "The organic food industry is a relatively new industry that is focused on producing high quality and healthy fruits, vegetables and even other sorts of foods, such as, but not limited to yogurts and other dairy products. The companies operating in the agricultural sector stated their mission to improve the quality of life by presenting customers with the highest quality products while at the same time registering profits and growth."
Abstract The writer of the paper contends that a celebrity enjoys a potential revenue fetching force that has to be exploited by the firms or institutions that market the fame of the celebrity. The author then examines and discusses the question that, if we accept that a celebrity can and will fetch revenue by his or her participation, is the very high premium paid for their endorsement or participation justified? The writer uses examples from both the world of entertainment and sports to illustrate and support his conclusions. The paper is heavily annotated.
Outline:
Introduction
The celebrity Endorsement and Profits
Looking at the Model
The Economics of Endorsement
Conclusion
Citations
From the Paper "The public which is enamored of a person, and a person who creates successfully a following for himself or herself in the chosen activity commands the power of bargaining for not only participation, but for the use of the image, endorsements of products, news worthiness and corporate advertising and marketing. In considering such activities, particularly sports, there are two aspects of the financial implications and there is evidence to show that team sports like cricket or football have lesser profitability and small clubs with marginal operations cannot compete with famous ones and the monopoly in profits is always held by the popular city club. A sports club cannot generate a positive cash flow for the reason that there is a potential fear of political involvement and therefore such clubs show the balances in negative. Sports franchisees fare better with the capital appreciation of the stock."
Abstract This paper discusses the financial troubles facing the Hollywood Police Department and looks at the challenge to find creative ways to generate revenue while still maintaining the mission to provide an excellent quality of life for every resident within the City of Hollywood. The paper examines some of the existing programs that have been working well within the Department as well as those that need improvement and then looks at some suggestions for new programs that could produce additional revenue.
Table of Contents:
Preface
Criminal Investigation Reimbursement Program
Reinstitute the Residential and Business Alarm Program
Vehicle Impoundment Ordinance
Citizen Workshops
Training Facility
Conclusion
From the Paper "Self defense classes would also be an excellent opportunity for citizens who choose not to sign up for a self defense class at a private school. Private classes normally expect you to sign a contract that can come with high monthly fees. At a recent Homeowners Association Meeting a resident asked if we taught self defense classes. I believe citizens would be interested in classes that are only a few weeks long, taught by certified Police Officers who are also defensive tactics instructors. The classes could also include some basic crime prevention tips like how to stay safe at shopping plazas during the holiday season. Citizen workshops could generate a small amount of revenue but more importantly would provide an affordable service for the communities we all serve."
Tags: residents finances operation costs, quality of life
Abstract This paper examines the history of school funding in the state of Texas and the attempts to fund equitable educational opportunities for all Texas children. In particular, it discusses the the "Robin Hood" revenue-sharing law, which was signed into effect in 1993 and literally siphons funds from wealthy school districts and diverts them to poorer schools. It analyzes how the plan has been anathema to many, since it was signed into law by Ann Richards, the state's last Democratic governor, and evaluates its advantages and disadvantages.
From the Paper "The Texas Supreme Court agreed with the plaintiffs and stated that an efficient system must provide "substantially equal access to similar revenues per pupil at similar levels of tax effort." (Hughes, 2002) Basically, this means that a poor district should be able to operate on the same revenue per pupil from a one-cent tax increase as any other district would from the same one-cent increase. So the Robin Hood plan was implemented in 1993 as a temporary measure to provide funds until a more permanent solution could be devised. The plan was never intended to be permanent, none the less, poorer schools have become accustom to the higher funding levels, and they are hesitant to consider a new plan which would mean a possible decline in income."
