Essay on Bausch + Lomb's Unethical Practices and the FASB Codifications

Essay on Bausch + Lomb's Unethical Practices and the FASB Codifications

Length: 1401 words (4 double-spaced pages)

Rating: Powerful Essays

Open Document

Essay Preview

Bausch + Lomb, now a division of Valeant Pharmaceuticals International, Inc. began in 1853 in Rochester, New York, as a small optical shop that grew to become a multi-billion dollar corporation with approximately 12,000 employees worldwide. Its mission is to help you see better to live better, and to protect and enhance the gift of sight. Its products consist of three different marketed goods. The first of which is its vision care segment that includes products such as contact lenses, and solution to clean and care for them with. Its second line of products is pharmaceuticals, such as over the counter eye drops, as well as medicine to treat a range of eye conditions such as glaucoma and conjunctivitis. Bausch and Lomb’s last line of products include a full suite of products such as intraocular lenses and other surgery equipment needed for cataract and vitreoretinal surgeries (About Bausch + Lomb).
However, in the 1990s the company’s vision care sector ran into ethical accounting issues relating shipment of its product and the subsequent revenue recognition. The market for contact lenses began shifting away from traditional contact lenses, and instead became focused on the new frequent replacement and disposable lens model created by Johnson and Johnson (Maremont). Where Bausch and Lomb went wrong is, “The company increased reported revenues from sales of contact lenses and sunglasses by shipping the products to warehouses although there were no legitimate orders, by secretly agreeing to allow customers to return unwanted lenses and by recording sales in the fiscal year 1993 even though the items were not shipped until after the fiscal year ended on Dec. 25.” (Norris). This process is known as channel stuffing, and done by forcing...

... middle of paper ...

... better position than they truly are to encourage extra investment, and approval of new loans. The practice of channel stuffing, while beneficial in the short term, is very detrimental to a company’s long-term financial healt

Works Cited

"About Bausch + Lomb." Bausch + Lomb. N.p., n.d. Web. 16 May 2014.
Financial Accounting Standards Board (FASB). Accounting Standards Codification TM. Financial Accounting Standards Board (FASB), 2010. Web. 16 May 2014.
Maremont, Mark. "Numbers Game At Bausch & Lomb?" Bloomberg Business Week. Bloomberg, 18 Dec. 1994. Web. 16 May 2014.
Norris, Floyd. "Bausch & Lomb and S.E.C. Settle Dispute on '93 Profits." The New York Times. The New York Times, 18 Nov. 1997. Web. 16 May 2014.
Plunkett, Linda M., and Robert W. Rouse. "Revenue Recognition and the Bausch and Lomb Case." CPA Journal Sept. 1998: n. pag. CPA Journal. Web. 16 May 2014.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

The Financial Accounting Standards Board (FASB) Essay

- To help accounting professionals easily navigate through 50-plus years of unorganized US generally accepted accounting principles (GAAP) and standards the Trustees of the Financial Accounting Foundation approved the Financial Accounting Standards Board (FASB) Accounting Standards Codification (Codification.) By codifying authoritative US GAAP, FASB will provide users with real-time and accurate information in one location. Concurrently, FASB developed the FASB Codification Research System; a web-based system allowing registered users to electronically research accounting issues....   [tags: Accounting]

Powerful Essays
946 words (2.7 pages)

Why Was Codification Needed? Essay

- ACCT540 Week 3 Assignment Answer the following questions with information you learned in the document , your book, and through Internet research: Why was codification needed. What is the goal of codification. What authoritative literature does the codification supersede. How is the codification structured. Include as discussion of the topic, subtopics, sections and subsections in your answer. Describe the numerical indexing system. What is a “landing page?” What is the difference between the “general topics landing page,” the “industry topics landing page” and the “subtopics landing page?” What is “pending content?” How is SEC content differentiated from FASB content....   [tags: Pension, Cash balance plan]

Powerful Essays
1008 words (2.9 pages)

Fasb Vs. Fasb 's Report On Lease Accounting Standards Essay

- In 2010 and 2013, the FASB, in connection with the IASB, released exposure drafts outlining upcoming changes to lease accounting standards. This draft was in direct response to the SEC’s 2005 report outlining the problems associated with off-balance sheet transactions (FASB and IASB, 2013). The SEC’s main concern was that business managers are intentionally negotiating lease terms that do not actually meet FASB bright-line rules for capitalization, but in all other aspects, should be capitalized....   [tags: Balance sheet, Asset, Lease, Liability]

Powerful Essays
701 words (2 pages)

Analysis Of The Fasb Issued A New Standard Essay

- On February 25, 2016, the FASB issued a new accounting standard with respect to the financial reporting of leases. Under the new standard, lessees will need to report all leases with a long-term on the balance sheets. The new standard purports to increase the comparability and transparency among different companies and provide investors of a more faithful representation with more accurate information on company liabilities. The new financial reporting standard will retain capital leases and operating leases....   [tags: Financial statements, Balance sheet]

Powerful Essays
1244 words (3.6 pages)

Essay on Analysis Of Pina Bausch 's ' Pina Bauschvollmond '

- Name: Course: College: Tutor: Date: Pina BauschVollmond Vollmond by Pina Bausch was created in 2006 and it accentuates dancers of all races and ages in their search for solitude and an in-depth desire to love. The dance is full of unfeeling apathy, laughter and a startling vitality. There are dizzying, poignant and amazing solos that are performed on some bare proscenium. However, these actions alternates with features of both playful and playful seduction as well as comical theatre sketches within the wonderful design....   [tags: Dance, Performance, Modern dance, Choreography]

Powerful Essays
1142 words (3.3 pages)

Technical Difficulty Regarding Codification And Codification Essay

- 2- Technical Difficulty Regarding Codification The codification had fierce resistance, since several opponents argued that the codification process would change the legislation, hence it was not clear enough how the interpretation would be exercised whenever the language employed in the statutory statement differed from the ones employed to define common law principles and rules. Therefore, for some, the codification would thwart development and would necessarily lead to increase in overall costs since directors need to pursue advice when enactment first takes place....   [tags: Law, Common law, Obligation, Duty]

Powerful Essays
1093 words (3.1 pages)

Fasb Standard Developments Essay

- In 1929 the stock market crashed and along with it went public and investor confidence in the fairness of the securities markets. In response to this congress created the Securities and Exchange Commission (SEC) in 1934, which was given the authority to stipulate the methods to be used when compiling financial reports. Although the SEC was given this power, it turned to the private sector for the establishment of GAAP. Nonetheless, the SEC has remained active in the process, demonstrating its statutory authority to create accounting standards as it sees fit....   [tags: Accounting]

Free Essays
1509 words (4.3 pages)

The Norton Anthology of Short Fiction by Richard Bausch and R.V Cassill Essay example

- ... At the beginning, the mark starts to vanish the mark from her cheek but unfortunately without knowing he was also killing her own wife with these drug. This story shows to all the readers that we have to accept the person we love as the way she or he is as exclusive and unique. This story is very touchable and sad. This story sometimes can happen to people in real life that is why the author tries to prevent us from do something similar that can hurt us or hurt someone we love. Another story very touchable is "Hills Like White Elephants" by Ernest Hemingway, which is about a couple who are undecided to either to abort a babe or not....   [tags: book analysis]

Powerful Essays
547 words (1.6 pages)

The Reason For The Codification Of Directors ' Duties Essay

- 1- The Reason for the Codification of Directors’ Duties Before the Act of 2006, the UK did not mention anything regarding even the most general director’s duties whatsoever. Remarkably with the Companies Act 2006, the UK went from having a legislation that contained no statutory statement of directors’ responsibilities to a system that contains a broad statement of such duties. This statement then became applicable in place of the comparable obligations mandated on directors by the general regulation....   [tags: Law, Common law, Duty, Obligation]

Powerful Essays
1037 words (3 pages)

The Codification of the Fourth Amendment Essay

- The most difficult problem that arises for the courts because of technology is the codification of the Fourth Amendment to apply to technological change and progress. The vast changes technology brings to surveillance, security, and data collection offer a challenge to courts in classifying these new technologies and monitoring their use within the limits of the Fourth Amendment. The Fourth Amendment states that people have the right to be “secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” An influential dissent written by Louis Brandeis contends that the amendment does not simply protect a person’s property but the “right to be let alone.”...   [tags: technologicals change, privacy, amendment]

Powerful Essays
1212 words (3.5 pages)