This website uses cookies to ensure you have the best experience. Learn more

Apple Inc. Revenue Recognition Essay

952 words - 4 pages

Apple case: Concept questions

Question a: In your own words, define “revenues”. Explain how revenues are different from “gains”.

Revenue is the amount earned by a company by its main activities such as selling merchandise or providing services. revenue covers money that comes into the business but expenses must be removed before the profit is recognized

The primary difference between revenue and gains is that revenue is money generated through primary business activities, whereas gains are achieved through peripheral business activities, such as selling an old machine. A gain is the amount received that is in excess of the asset's carrying amount (book ...view middle of the document...

The revenue recognition criteria that are outline in the FASB’s statement concept No. 5 as mentioned in the paragraph 63 of FASB’s statement are-
1. Definitions—The item meets the definition of an element of financial statements.

2. Measurability—It has a relevant attribute measurable with sufficient reliability.

3. Relevance—The information about it is capable of making a difference in user decisions.

4. Reliability—The information is representationally faithful, verifiable, and neutral.


Question c: Refer to the revenue recognition discussion in note 1. In general, when does Apple recognize revenue? Explain Apple’s four revenue recognition criteria. Do they appear to be aligned with the revenue recognition criteria you described in part b, above?

Apple recognizes revenue when
1. There is persuasive evidence of an arrangement exists
2. The company completed its product’s delivery to the destination
3. The sales price is fixed or determinable,
4. Collection of money is probable, and

Apple generally recognizes revenue from the sales of the company’s hardware products and software products, and third party’s digital content sold on iTunes store as standalone sales of software, sales of software upgrade, and sales of software with the hardware. Apple’s product is considered delivered to the customer once it has been shipped and title and risk of loss have been transferred. For online sales, the company defers it revenue until the customer receives the product as Apple legally retains a portion of the risk of loss on these sales during shipment. Apple fixed its own products as well as determine the price of the tangible software products that include multi-element arrangement by using hierarchy. The company records deferred revenue when it receives...

Other Essays Like Apple Inc. Revenue Recognition

Apple Inc. Understanding Client's Business Essay

958 words - 4 pages because of the profusion of its intangible assets, research and development expenditures, and revenue recognition complexity, and perhaps after Blackberry, going concern principle. The leading company in this risky industry today is Apple, Inc. By operating in the Computer and Software industry, Apple is prone to the inherent business risks related to its industry, and some to the company itself, and is therefore, from an audit standpoint, a high

Marketin Plan Essay

5019 words - 21 pages of all those involved in the process, are to be commended. It can be assumed, or surmise that Tim Cook’s, in continuation of Steve Jobs ethical values, have done a good job and succeed. Conclusion Apple, Inc. has the right idea when it comes to success. With strong marketing and branding, the iPad has increased the revenue generated by Apple. Since the iPad launch, in 2010, and until 2013, Apple sold 200 million iPads. In 2012 alone, Apple

Iphone Global Marketing Marketing Essay

4719 words - 19 pages things can be done successfully if Apple overcome and navigate the challenges of Chinese economy. For Apple to reach Chinese market is something more than generating revenue. Through iPhone Apple can build brand recognition and this is a great way of driving future sales. Following are some graphs which will show the facts and figures regarding china and Apple iPhone to support our project Read more:

Case Analysis - Apple Inc

1604 words - 7 pages . In 2008, Apple Inc earned a profit of $1.07 billion from revenue of $7.46 billion. Over half of Apples income was generated from the sales in these new products (Yoffie &Slind, 2008). Steve Jobs and Steve Wozniak founded Apple Computer in April 1976. Their first computer was called the Apple I. Apple Computer was incorporated in 1977 by bring on another partner, A.C. “Mike” Markkula, Jr. With the help of Markkula, Jobs and Wozniak

Individual Business Analysis Part Ii- Apple Inc

2622 words - 11 pages the negative as well fluctuating by an average of 80% from 2007 to 2010. (Businessweek, 2011) In comparison to Dell Inc and Microsoft Corp, Apple Inc has been able to produce 3.7 billion dollars more in revenue then Dell, but trails behind Microsoft by a margin of 4.7 billion in revenue. In addition to reducing the percentage of sales devoted to cost of goods sold from a lower percentage than Dell and Microsoft, Apple has managed to

Strategic Management Of Apple, Inc

1583 words - 7 pages significant move because the organization became more independent, and it was no longer known as a vendor to Macintosh personal computer line (Yoffie & Slind, 2008). This strategic move paid off; a year and half later, Apple Inc.’s third quarter net profit of $1.07 billion on a $7.46 billion in revenue (Yoffie & Slind, 2008). SWOT Analysis of Apple, Inc. Strengths (Competitive Advantage) The Apple brand

Enron and Apple Comparison

2743 words - 11 pages liabilities, and avoiding proper financial disclosure. It turns out that the “most innovative” aspect of Enron may have been its “innovative” accounting practices it used to mislead and defraud its stakeholders. The “Merchant Model” Revenue Recognition As mentioned previously, majority of Enron’s business came from trading energy in the energy markets. Typically, traders follow the “agent model” in recognizing revenue, where the brokerage or

Financial Management

2473 words - 10 pages Action 1 Hewlett-Packard and Apple Inc. technology stock companies attempted to make profits from the rising consumer demand after the crash of 2008. Hewlett-Packard better known as HP is the world’s largest technology company that provides printing and personal computing products and IT services, software and solutions that simplify the technology experience for consumers and business. Mark Hurd was the CEO at HP from 2005 to 2010. He took

Apple Marketing Paper

1040 words - 5 pages Apple Computer, Apple, or Apple Computer Inc.; It doesn’t matter what you call the giant company, as long as you know what they are about, and you call them. Apple may be thought of as a small part of the computer market, but their branding strategies and product identity tactics are so well planned and thought out, that a 4 year old could recognize the Apple iPod line; and they do! Since 2001, the world has changed, and quite a bit because of

Apple Computer, Inc.: Maintaining the Music Business While Introducing Iphone and Apple Tv

3134 words - 13 pages Apple Computer, Inc.: Maintaining the Music Business while Introducing iPhone and Apple TV Overview/Introduction Through an analysis of the case study of Apple, Inc. this paper will describe key elements that helped make Apple the successful company it is today. The analysis of the three key environments of a business will be examined, including; general, industry, and competitor environments. Also explored will be the available

Apple Consumer Decision Making

519 words - 3 pages Apple has won several excellence in marketing awards. Why? Marketing plays an integral role for Apple Inc. It is the best way for them to let their consumers whats in store for them, increase revenue, alert their competitors that they are always working to provide their consumers with the best and be one of the best electronic and software companies worldwide. Apple tries to target every group of people; students, parents, and children

Related Papers

Product Life Cycle Of Ipod Essay

1715 words - 7 pages advertising as a new product would. Since the release of the iconic iPod by Apple in 2001, sales of the Ipod Classic, Nano, Shuffle and Touch have sky rocketed, (appendix 1,) Thus allowing iPod to own over 70% of the portable music device market today according to Gene Munster, managing director and senior research analyst at Investment Banking firm Piper Jaffray. In 2005 iPod held 33%, 2006 40% and 2007 35% of Apples total revenue. It can be seen that

Apple Swot Analysis

2673 words - 11 pages • Dowling, Steve (2011). Apple reports third quarter results. Apple Inc. • Dowling, Steve (2010). Apple reports fourth quarter results. Apple Inc. • Hertzberg, Robert (n/a). Top 50 technology R&D spenders. CIO Zone. • Interbrand (2010). Best Global Brand 2010. Interbrand website. • iPhone Sales Help Profit and Revenue at Verizon (2011). The New York Times. • Jacobsson, Sarah (2011). Kid sells kidney for iPad 2, regrets

Accounting Essay

1018 words - 5 pages iPhone at Apple, Inc.: The case provides students with an understanding of the criteria for revenue recognition and the role of accrual accounting in reflecting timing differences between cash receipts and product/service delivery, especially in situations where there are multiple deliverables. The case also enables students to reflect on (a) the use of supplementary non-GAAP disclosures, (b) the impact of accounting on firm value and (c

Business Analysis Part I

1829 words - 8 pages technology to be innovative and produce cutting-edge products is Apple Inc. The history of this company starts with two college drop-outs in 1976 (Apple, 2012). The late Steve Jobs and Steve Wozniak began Apple Computer as a company aiming to be the sophistication in the PC industry. After almost going bankrupt in 1996, Jobs recreated the brand and its image and renamed the company Apple Inc (Linzmayer, 1999). The company’s innovation would lead