From the course: Running a Profitable Business: Revenue Recognition

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Buying an iPhone

Buying an iPhone

From the course: Running a Profitable Business: Revenue Recognition

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Buying an iPhone

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- You've seen the cell phones that I've used over the years? - I have, some of them look like World War II walkie talkies. - Yeah, very funny. Well my son has been trying to ease me into modern society so he helped me buy an iPhone. - Hey, congratulations! On behalf of the rest of humanity, let me welcome you to the 21st century. - Oh, thank you very much. Thank you. Now, you may not know that there are some interesting revenue recognition issues associated with iPhones. - Well, it seems pretty straight forward to me. You pay money, and Apple gives you an iPhone. - Aah, well let me explain. When Apple sells a person an iPhone, Apple is actually selling a bundle of three different things. - Three things? - Yeah, first there's the iPhone itself, which is a functioning package of hardware and software. - Number one, the iPhone. - Second, with respect to iPhone sales, Apple states that it may, from time to time, provide future unspecified software upgrades and features free of charge to…

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