ACCT 6230 Week 5 HW

Week 5 Assignments – Revenue Recognition

DUE DATE: Sunday midnight of Week 5, submitted in a MS Word (or Excel if

computations required) document with filename format:

Last First_Week X hwk.doc or .xls Make sure your name appears on each page of the

homework using the header function.

Homework questions:

1. Define the terms “realized” and “earned” as they relate to revenue recognition. Name at

least 3 common criteria that are used when determining that revenue is recognizable.

(SAB 104 Topic 13 p9 in the reference material section is a good source for this).

2. Find an example of revenue recognition fraud that has made news headlines (a different

one than already provided in the readings). What type of revenue fraud was committed

and how was it perpetrated? How was it discovered? What US GAAP guideline(s) was

violated? Describe how it may have been prevented.

3. SOP 97-2 provides guidance on revenue recognition for software. An important concept

in the application of this guidance is VSOE. What is VSOE and why is it important?

4. Why does collectability matter in revenue recognition?