Is it improper to lean on customers to take delivery of inventory early, so the firm (the seller) can book revenues to “hit the number”?
How would you determine willful intent to mislead shareholders with respect to revenue recognition, if you were the lead prosecutor investigating Power Solutions International?
How might GE’s culture of so-called “success theater” have contributed to potentially aggressive accounting (revenue recognition) practices? What systems may help control such tendencies, if they are indeed problematic?
Do you believe the new revenue recognition standard will meet Mr. Golden’s objective of giving investors “better information”? Why or why not?
For revenue recognized over time on long term construction contracts, what are the estimates that firms make? How do these estimates affect when and how much revenue and profit are recognized? Is there any reason why a firm would not want to divulge these estimates, or changes in these estimates?
As the implementation date for the new revenue recognition standard nears, would you be able to describe to someone (perhaps on an interview) what the new standard says, in 5 minutes or less? Bottom line, when may a firm credit revenue?
Microsoft obtained SEC approval before disclosing non-GAAP revenue figures in its financial filings. What do you think the consequences would have been had Microsoft not received pre-clearance before announcing non-GAAP revenue?
How would you determine whether financial reporting is “unbalanced”? How would you measure quality financial reporting? Do you think this attribute of financial reporting varies by country?
Do you think the new revenue recognition standard will open the door to financial shenanigans, given the new focus on judgment and broad principles? How would you be able to tell if this is the case? How will the SEC monitor revenue recognition?
So the FASB has postponed the effective date by which firms must adopt the new revenue recognition rule. What might this say to you about the cost of the new standard? How would you measure the cost? How would you measure the benefit of the standard?
How would you propose that sellers of gift cards, which are ultimately not redeemed, account for unwinding the liability (unearned revenue)? Do you think your proposed solution would matter to investors? Which firms would be most affected by your proposal?
Should standard setters incorporate direct input by “front line” practitioners in setting new standards? Should the new standard on revenue recognition be further delayed? Should it be changed? If so, what recommendations would you make? Explain the quote, “unless it is allowed, it is forbidden,” and, “unless it is forbidden, it is allowed.”
Do you agree that accounting standards are too complex? If so, how could they be made simpler? What would be the costs of doing so? The benefits?
When should revenue be recognized in the mobile (e.g., iPhone) gaming industry? Why does it matter if it is recognized at the time of payment or over the life of usage, particularly if the average period of use is so short?
Given the length of time on the joint revenue recognition project, what does the new revenue recognition standard suggest about collaboration between the FASB and the IASB? Will the new standard improve accounting? If so, how exactly?
Why does the author consider the joint IASB/FASB revenue recognition to be the most successful one yet? How would you measure success on these joint projects?
Why are the standard setters writing new rules for revenue recognition? Who will benefit from the new rules?
