Revenue Recognition Essay Accounting, Finance, SPSS Essay

Please follow the instructions carefully. This assignment is to be completed in one Word document and uploaded in Canvas before November 20, 2020, 11:59 pm. You are to use “Word,” 12-point font and 1-inch margins. You should use the Accounting Horizon’s editorial policyPreview the document for formatting references and citations.
State the 5 steps to revenue recognition using a diagram that you develop. The diagram should include the steps and rule/definitions pertaining to each step. There should also be a place for explaining differences between IFRS 15 and ASC 606
In two sentences, state two differences between IFRS 16 and ASC 606 that you believe are significant differences that never the two shall converge. In one additional sentence explain why.
Students with last name beginning with H-P complete the following two examples.
Collectability threshold:
Assessment based on goods or services to be transferred. Company C contracts with Customer D to sell 1,000 units for a fixed price of 1 million. D has a poor payment history and often seeks price adjustments after receiving orders and so C assesses that it is probable that it will collect only 70% of the amounts due under the contract. Based on its assessment of the facts and circumstances, C expects to provide an implicit price concession and accept 70% of the fixed price from D. Is the collectability probable? Explain in 2 sentences or less
Significant financing component: Change in expected completion date.
Company K enters into a contract with Customer C to construct and deliver a piece of equipment. K determines that the contract contains a single performance obligation that is satisfied at a point in time when the equipment is delivered to C. Construction is expected to take two years. K and C agree consideration of 80, which is payable and paid on the date the contract is signed. At contract inception, K considers the terms of the sale and determines that the contract includes a significant financing component because: – there is a significant period between payment and delivery of the asset; – the asset is regularly sold at a higher price; and – there is no evidence to suggest the advance is for another reason. K determines the discount rate, based on its credit characteristics, to be 12%. Therefore, to reflect the financing that it is receiving from the advance payment, K recognises interest expense of 20 in the construction period and revenue of 100 (80 × 1.122) on the delivery date. After Year 1, K determines that the construction will take three rather than two years. Should K record a revised transaction price and date? Answer each question (price and date) with a one-sentence explanation for each.

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Baiman, S., and M. Rajan. 2002b. Incentive issues in inter-firm relationships. Accounting, Organizations and Society 27 (3): 213–238. Berry, R. 2003. Testimony before the Senate Committee on Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations. November 18. Available at: http://hsgac.senate.gov/files/ 111803berry.pdf. Cohen, D., A. Dey, and T. Lys. 2005. The Sarbanes Oxley Act of 2002: Implications for Compensation Structure and Risk-Taking Incentives of CEOs. Working paper, New York University, University of Chicago, and Northwestern University. Cole, R., and T. Yakushiji, eds. 1984. The American and Japanese Auto Industries in Transition. Ann Arbor, MI: University of Michigan. Daugherty, B., and W. Tervo. 2010. PCAOB inspections of smaller CPA firms: The perspective of inspected firms. Accounting Horizons 24 (2): 189–219. Dechow, P. M., R. Sloan, and A. Sweeney. 1995. Detecting earnings management. The Accounting Review 70 (2): 193–225. Dechow, P. M., S. P. Kothari, and R. L. Watts. 1998. The relation between earnings and cash flows. Journal of Accounting and Economics 25: 133–168. Dechow, P. M., and I. Dichev. 2002. The quality of accruals and earnings: The role of accrual estimation errors, The Accounting Review 77 (Supplement): 35–59. Dhaliwal, D., Erickson, and O. Li. 2005a. Shareholder income taxes and the relation between earnings and returns. Contemporary Accounting Research 22: 587–616. Dhaliwal, D., L. Krull, O. Li, and W. Moser. 2005b. Dividend taxes and implied cost of equity capital. Journal of Accounting Research 43: 675–708. Dikolli, S. S., J. H. Evans III, J. Hales, M. Matejka, D. V. Moser, and M. G. Williamson. 2013. Testing analytical models using archival or experimental methods. Accounting Horizons27 (1): 129–139. Easton, P. 2003. Discussion of: The predictive value of expenses excluded from pro forma earnings. Review of Accounting Studies 8: 175–183. Engel, E., R. Hayes, and X. Wang. 2007. The Sarbanes-Oxley Act and firms’ going-private decisions. Journal of Accounting and Economics (forthcoming). Fehr, E., and K. Schmidt. 2003. A theory of fairness, competition, and cooperation. In Advances in Behavioral Economics, edited by C. Camerer, G. Loewenstein, and M. Rabin, 271–296. New York, NY: Princeton University Press. Financial Accounting Standards Board (FASB). 2006. Accounting for Uncertainty in Income Taxes, and Interpretation of FASB Statement No. 109. FASB Interpretation No. 48. Financial Accounting Series. Norwalk, CT: FASB. Janis, I. L. 1982. Groupthink: Psychological Studies of Policy Decisions and Fiascoes. Boston, MA: Houghton Mifflin. Levitt, A. 1998. The numbers game. Speech delivered at New York University, Center for Law and Business, September 28. Maggi, G. 1999. The value of commitment with imperfect observability and private information. RAND Journal of Economics (Winter) 30: 555–574. National Commission on Fraudulent Reporting (the Treadway Commission). 1987. Report of the National Commission on Fraudulent Financial Reporting. Washington, D.C.: NCFFR. Nelson, M. W. 2003. Behavioral evidence on the effects of principles- and rules-based standards. Accounting Horizons 17 (1): 91–104. Nelson, M. W. 2005. A review of experimental and archival conflicts-of-interest research in auditing. In Conflicts of Interest: Challenges and Solutions in Business, Law, Medicine, and Public Policy, edited by D. A. Moore, D. M. Cain, G. Loewenstein, and M. H. Bazerman. Cambridge, U.K.: Cambridge University Press. Rigdon, E. E., R. E. Schumacker, and W. Wothke. 1998. A comparative review of interaction and nonlinear modeling. In Interaction and Nonlinear Effects in Structural Equation Modeling, edited by R. E. Schumacker, and G. A. Marcoulides, 1–16. Mahwah, NJ: Erlbaum Associates. Scholes, M., M. Wolfson, M. Erickson, E. Maydew, and T. Shevlin. 2008. Taxes and Business Strategy: A Planning Approach. 4th edition. Upper Saddle River, NJ: Pearson Prentice Hall. Schultz, E., and T. Francis. 2002. Companies profit on workers’ deaths through ‘‘dead peasants’’ insurance. Wall Street Journal (April 19): 1. Securities and Exchange Commission (SEC). 2002. Certification of Disclosure in Companies’ Quarterly and Annual Reports. Release Nos. 33-8124, 34-46427. Washington, D.C.: SEC. U.S. House of Representatives. 2002. The Sarbanes-Oxley Act of 2002. Public Law 107-204 [H. R. 3763]. Washington, D.C.: Government Printing Office. Footnotes Footnotes are not to be used for documentation. Textual footnotes should be used only for extensions and useful excursions of information that if included in the body of the text might disrupt its continuity. Footnotes should be consecutively numbered throughout the manuscript with superscript Arabic numerals. In the initial submissions, footnotes may be at the bottom of the page. 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