The proposed standard update regarding Intangibles – Goodwill and Other Internal-Use Software provides clarity on the accounting for implementation costs of a hosting arrangement that is a service contract and requires additional disclosures surrounding this area to provide financial statement users with more information surrounding the internal-use implementation costs and hosting arrangements. Per ASC 350-40-15-4A, the proposed update will be applicable to internal-use software that a customer obtains access to in a hosting arrangement, given that the customer has the contractual right to take possession of the software at any time without a significant penalty, and it is feasible for the customer to run the software on its own hardware or contract with another unrelated party to host the software. Hosting arrangements that don’t meet both criteria in ASC 350-40-15-4A are considered service contracts. The implementation costs of a hosting arrangement for identified service contracts are to be treated as though they were an internal-use computer …show more content…
The primary basis for this categorization varies depending on the phase of the project. In addition to the changes in the timing of the internal-use software capitalization, the new standard requires the entity to disclose a general description of the software acquired or developed, the various significant judgements and assumptions applicable, both a qualitative and quantitative description of the costs that were and expensed or capitalized during the period, and a description of the period over which the implementation costs are an expense in the income statement (ASC
1. Accounting for R&D does not appear to be in compliance with SFAS No. 2. The work is of the nature described in SFAS No. 2, para. 9, and is not being conducted for others under contract.
S.B. Solutions and Electronics, has many ways we can capitalize our company. There will be two methods of the way the electronics will be reported on our financial statements. One way, is when a customer signs up and wants X amount of Tablets it will be reported in the balance
Based off of the data provided in the case study it would appear that under the traditional costing. Which are the cost that were incurred to produce OS-367. It appears that those cost were being allocated to GS-157 and HS-241. The cost per unit for OS-367 was $10 under the traditional costing system and the same has become $13.75 under the ABC system.
On May 28, 2014, the Financial Accounting Standard Board and the International Accounting Standard Board issued ASC 606, Revenue From Contracts With Customers. The new standard will affect all entities including public, private, and not-for-profit that enter into contracts with customers that involve goods and services being transferred. It also effects contracts that transfers nonfinancial assets unless within the scope of other standards such as leases and insurance contracts. The main purpose of the standard is that involved party should recognize revenue that reflects the transfer of the good and services in an amount equivalent to they expect to receive in exchange for the goods and services. There are five steps to explain how the ASC 606 Standard works. The first step is to identify the contract with
The goal of the Codification is to simplify the organization of thousands of authoritative U.S. accounting pronouncements issued by multiple standard-setters. To achieve this goal, the FASB initiated a project to integrate and topically organize all relevant accounting pronouncements issued by the U.S. standard-setters including those of the FASB, the American Institute of Certified Public Accountants (AICPA), and the Emerging Issues Task Force (EITF)
Rogers, 2003). These accruals were supposed to reflect the estimate line costs and other expenses that WorldCom had not yet paid (Beresford, Katzenbach, & C.B. Rogers, 2003). Releasing the accrual is appropriate when it turns out that less is needed to pay the bills than has been expected to pay. Instead, WorldCom provided offset against reported line costs when the accrual was released which reduced reported expenses and increased pre-tax income (Beresford, Katzenbach, & C.B. Rogers, 2003). When the accruals started to run out, WorldCom came up with another method, capitalization of line costs. WorldCom started classifying line cost expenses as long-term capital investments in 2000 (J. Randel Kuhn & Sutton, 2006). These expenses are required to immediately recognize in the period incurred since the expenses are not for assets that can be capitalized and depreciated over their useful life in accordance with GAAP. By falsely recording these expenses, WorldCom reported an artificial increase in its net income and earnings before interest, taxes, depreciation and amortization (What Went Wrong at WorldCom?,
Section 340B of the Public Health Service Act is a drug pricing program enacted by Congress in the early 1990s. Prior to 340B, Congress created the Medicaid Rebate program in the Omnibus Reconciliation Act of 1990 due to the high costs that Medicaid was paying for outpatient drugs. The program calls for drug makers to create a rebate agreement with the Department of Health and Human Services (HHS) in a manner that is similar to the discounts manufacturers provide for large purchasers. If an arrangement is not reached with the HSS, the drug is ineligible for federal Medicaid coverage. [1]
In BT and Asda their staff need skills like excellent sales and negotiation skills good communication and having confidence and motivation with determination to strive for good customer service. Additionally, the ability to work as a part team good organisational and time management skills for resilience to deal with customers who turn you down when you are trying additionally both business will be trained to have good customer service meaning they will be taught to be friendly and mannered and puts the customer first as this skill is very important in creating loyal customers.
In a significant step towards convergence, the FASB and IASB (“the Boards”) issued the Exposure Draft, Revenue from Contracts with Customers in 2010. The goal was to create a single joint revenue recognition standard that companies could apply consistently across industries and capital markets thereby improve financial reporting. The Boards highlighted a number of improvements in the proposed standard - removing inconsistencies, improving comparability, requiring enhanced disclosures and clarifying the accounting for contract costs. Instead of focusing on “realized/realizable” and “earned” the Exposure D...
The requirements and cost benefit analysis took several months to complete and a final decision would not be made until 18 months after the initiation of this project. The end result of the requirements and cost benefit analysis concluded that it was most beneficial to our business partners to build our own accounting engine; however this was not the elected solution.
When planning configuration identification is it important to: define how the classes and types of assets and CIs are to be selected; define the approach to identification; allocating identifier such as serial number, version number to CIs; uniquely naming and labelling all the assets or service components; define roles and responsibilities of the owner of CI; defining and documenting the criteria of selecting CIs; specifying the relevant attributes of each CI; deciding a level at which control must be exercised. (Office of Government Commerce, 2007). By identifying CIs, a baseline of software-related items will be established. This way, changes to the baselines can easily be controlled; audited and reported. According to ITIL best practices, CIs selection should be done by applying top down
Time-phased project work is the basis for project cost control. Work package duration is used to develop the project network. Further, the time-phased budgets for work packages are timetabled to establish fiscal measures for each phase throughout the project. The time-phased budgets are to emulate the real cash needs of the budget, which will be used for project cost control. This information is useful to estimate cash outflows. The project manager's attention is on when the costs are to occur, when the budgeted cost is earned, and when the actual cost materializes. This information is made up to measure project schedule and cost variances (Gray & Larson, 2005). The following are typical types of costs found in a project:
The defensive action is to review the daily expenses and avoid possible circumstances, which jeopardize business profits. The IT offers various possibilities to improve overhead and knowledge of consumers (Bakos, & Treacy, 1986). The loss of assistance will decrease the competitive advantage and earnings during unstable market conditions. The direction of IT increases revenue of 25% through project management software. The commitment of IT will ensure the software eliminates confusion in compliance of project expectations through progress reports, which allow progressive decisions (Stevens, 2013). This strategy paves the road by removing the task of locating facts and collecting miss-matched information.
In the 1980’s, more attention was given to management accounting, and its inability to keep up with technology. The advances in technology in manufacturing and information technology led to the need for a more advanced management accounting system that replaces the traditional cost management system already in-place. The traditional cost management systems were in place to offer neutral and objective financial information that was easy to calculate (Talha, Raja, Seetharaman, 2010, P. 83-91).
...igure within the system. The software should enable usability in accordance to the company requirements; it should be in a position to have the functionality that meet the need of the company.