Acct 557 Week 1 Discussion Thread

Revenue recognition principle provides that companies should recognize revenue when goods and services are exchanged for cash or claims to cash. Revenues are realizable when related assets received are readily convertible to cash or claims to cash. In FASB Concepts Statement No. 5, revenues and gains are generally recognized when:

1. They are realized or realizable.

2. They have been earned through substantial completion of the activities involved in the earnings process.

How do you know if the company you are investing in has ethical executives? And how do you know that those executives will continue to act in an ethical manner when "times get tough"?

Corporate governance is the framework of rules and practices by which a board of directors ensures accountability, fairness, and transparency in a company's relationship with its all stakeholders (financiers, customers, management, employees, government, and the community).

Read more: http://www.businessdictionary.com/definition/corporate-governance.html#ixzz2SzSxaxrh

There are number of resources available to let one know if the company that one is investing in has ethical executives and if those executives will continue to act in an ethical manner when "times get tough". Those resources are: governance, accountability, management, metrics and analysis (GAMMA), Governance Metrics International (GMI), Institutional Shareholder Services (ISS) and Glass, Lewis & Co. etc. The resources listed can evaluates the governance of companies in emerging markets, according to shareholder influence, shareholder rights, transparency, and board effectiveness. Develops risk ratings and research related to companies' environmental, social, governance, legal and accounting practices. All the companies in the MCSI world index, the DJ STOXX 600 and the S&P 1500 are examined. Data are updated monthly and proxy research and voting recommendations are provided.

When is revenue recognized in the following...