Financial Reporting, Financial Statement Analysis, and Valuation[财务报告，财务报表分析，以及估值](36).ppt

Financial Reporting, Financial Statement Analysis, and Valuation:A Strategic PerspectiveSixth EditionStickney/Brown/Wahlen
Chapter 7
Revenue Recognition and Related Expenses
Revenue Recognition Some Interesting Situations
Global Crossing, munications, and others have created worldwide fiber-works in recent years.
For example, Global Crossing might create a fiber-work in India, munications might create a work in China, and each in turn might lease part of the capacity of works to each other.
The leases often give the lessee an indefeasible right of use to the capacity, essentially a legal transfer of title to the capacity.
pany books the “sale” of the legal rights to the capacity as revenue in the year they sign the leases.
They treat the “purchase” of the legal rights to the capacity as a capital expenditure, much like the purchase of a long-lived asset.
Does the swap of legal rights satisfy the revenue recognition criteria?
how should the firms establish the value of the contract? (no cash is involved after all)
GAAP has not definitively answered how to account for these types of transactions.
Revenue Recognition Some Interesting Situations
AOL, the services division of AOL Time Warner, generates subscription revenues from subscribers to its online services, as well as advertising revenues for advertisements it places on various web sites.
In the past, AOL entered into one such arrangement with eBay. Under the arrangement, AOL located firms that wished to advertise on the eBay web site. AOL sold the advertising space to panies and then remitted a portion of this amount to eBay.
AOL bore no credit risk if the firms failed to pay for the advertising space. AOL guaranteed the sale of a certain minimum amount of advertising space each month. Failure to sell the minimum space required AOL to make payments to eBay.
AOL booked the amount to be received from the panies as revenues and the amount paid to eBay as an expense. In turn, eBay booked amount rece