Join Jim Stice for an in-depth discussion in this video Wrap-up, part of Running a Profitable Business: Revenue Recognition.
- Lenders and investors want financial numbers…to help them evaluate the value and financial strength…of a company.…- Sometimes, especially for startup companies,…there really aren't many financial numbers to use.…The companies have a short, or non-existent history,…and their big startup costs create large reported losses…that are not really useful in predicting future performance.…- Revenue numbers are sometimes the only data available…for evaluating a new company.…- We categorize companies by the level of their revenues,…this is a million dollar company,…this is a hundred million dollar company,…this is a billion dollar company.…
Usually, when we use this sort of terminology,…we are talking about the amount of their revenues.…- Now you've heard of the famous Fortune 500 listing?…This is a list of the 500 largest companies…in the United States,…as identified by Fortune Magazine.…And how does Fortune identify these 500 largest?…By the amount of their reported revenue.…- By increasing its reported revenues,…a company increases its market value,…
But without recognizing revenue, a company can't hope to report any profit. Accordingly, company management is typically under great pressure to recognize revenue as soon as possible. Want to understand these concepts better? Join professors Jim and Kay Stice as they introduce the theory, practice, and implications of revenue recognition. Together they demonstrate how this seemingly innocent accounting topic can turn a reported profit into a reported loss, sometimes with multibillion dollar implications for company values.
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- Defining revenue recognition
- Timing revenue recognition
- Understanding multi-element transactions
- Valuing companies
- Reviewing the great revenue frauds and scandals of history