Accounting ASC Research Paper Example | Topics and Well Written Essays - 750 words

Accounting ASC - Research Paper Example An example of these guidelines are those provided by Accounting Standards Codification (ASC) that has within it two methods to recognize revenue for online retailers. One of these methods is the gross method and the other is the net method. Two online retailers that have been used in the examination of these two methods are Amazon and Overstock. ASC guidelines The ASC guidelines recognize two basic accounting methods in the case where one is recognizing revenues. These are the gross method and the net method. The gross method seeks to recognize the total amount of sales that have been made from which any discounts that occur within the time frame opened for discounts are then recorded. These discounts may be accrued in periods. This is where they have occurred in periods that are greater than two accounting periods and where the likely period of payment is not certain. The net method on the other hand records revenue in terms of the net sales that have been made on the product. In th e case where later on the customer decides not to take advantage of any discounts that have been offered then this is recorded as income. Gross method of accounting is one that considers the discounts that may be taken and majorly relies on how good a client is in honoring their obligations to pay. The net method on the other hand looks at the discounts that the customer has not taken advantage of and also on how ineffective the customer may be in honoring their obligations to pay. Amazon Amazon recognizes revenue on its books based on the satisfaction of four factors. The recognition is also dependent on the source of the revenue; this is as to whether it is from direct sales or commissions earned. The four factors considered are that there should be considerable evidence that there is the intent of conducting business. The next is that the goods have been delivered or the service has been rendered. The selling price also has to be determinable and fixed. Finally that the collectio n of the amount is to a certain extent assured. In cases where the price is not easy to determine and Amazon is the primary source of the goods then the net revenue is charged. Subscription fees are recognized as revenues over the life of the subscription. In cases where gift cards have been purchased, they are recognized as revenues when they are used by the customer or when they expire. Amazon is a company that utilizes the net method of revenue recognition. This is evident from the fact that the company recognizes the total revenue that is estimated to stem from any of the transactions that they make netting any promotional discounts that the products may have. This also nets the rebates that the products may attract and the allowance for any costs that may be involved in returning the goods. The recognition of this revenue is also limited to the point where the risk of loss and the title of any product sold have been transferred to the client. Overstock Overstock on the other ha nd has different revenue recognition procedures. They have a customer loyalty program whose revenue is allocated ratably over the period of ownership of the membership card. The revenue from rewards intended for those who are members are recognized when they take advantage of these rewards, when the rewards expires which is usually ninety days after the expiry of membership and when there is a breakage (when the redemption by the customer of rewards is highly unlikely). There have not been any instances of breakage. The revenues from gift cards are also recognized when they are redeemed or when redemption is highly unlikely from experience. It can be seen

Risk and value management Essay Example | Topics and Well Written Essays - 1000 words

Risk and value management - Essay Example Based on the primary objective of value management to develop project objectives with uttermost clarity, the process facilitates quest for background information on the project as well as the project’s needs. These initiatives facilitate an extensive development of knowledge on the project towards management competency of business knowledge. As a result, value management provides an opportunity for developing insights into a project for proper management of the strategic management stage and the entire project. Value management also creates time resource between the initiation stage of a project and the project’s implementation stage. With an outlined budget for value management’s time, an organization is able to identify and evaluate outlined objectives in a project for improvement. This therefore means that apart from the benefits of the value management, its incorporation in the project’s budget adds value to the briefing process as well as the entire p roject (Turner, p. 307). Value management also facilitates identification of client’s needs and expectations from a project. The analytical approach of the management that aims at identification of the objectives of the project particularly leads to an understanding of what the customer wants out of the project. This further facilitates development of objective and establishment of ground for customer utility at the completion of the project. Establishing customers’ needs is also important in the strategic briefing stage because the success and feasibility of a project is measured against expectations of the stakeholders. With all needs of the client identified by the value management process, the strategic briefing process develops the capacity to evaluate feasibility of the needs as well as incorporating the need into the project’s objectives. There is also an induced benefit of empowerment and development of team members in value management. The interactive approach in