Velocity

Lightho wasting disease Case In the lightho phthisis case, in that respect argon devil issues identified. Can the arrangement be considered as a dual deliverable? & How many units of recital? (Given we have two-fold deliverable) When analyzing the arrangement with its customers, it is certain that the contracts for delivery and installation of the ironware winding meets all criteria for revenue recognition set for in the (SAB none 104). There are two alternatives in the lighthouse case. * Identifying the whirl and service, as a single unit of account statement and recognizing some(prenominal) as the service is provided. According to (EITF 00-21), three criteria need to be met in order for a sixfold deliverable to be considered a separate unit of accounting. The first criteria being distributively deliverable need to have standalone value to the customer. But because the thingmajig does non meet the first criteria as having standalone value to its c ustomers; the cheat should be combined with the service pick outd oer the expect purport of the contract. * Second alternative pull up stakes be to recognize the devices and services separately. According to FASB 605-10-25-1(a) states that revenue and gains generally are non acknowledge until being recognize and earned.

Accordingly, if collection of the sale finalise is non reasonably assured, the installment method of recognizing revenue is not acceptable. Revenue recognition for the devices does not depend on the use of the service. Revenue already realized from the sale of device cast off behind be recognized at the time the work is con! summate 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 will be the preferred solution to the case. Revenue already realized from sale of device will be recognized over the sum measure of the life of...If you want to exhaust a full essay, order it on our website: OrderCustomPaper.com

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