Accounting ASC Research Paper Example | Topics and Well Written Essays - 750 words

Accounting ASC - Research Paper ExampleAn example of these guidelines ar those provided by Accounting Standards Codification (ASC) that has within it two methods to love receipts for online retailers. One of these methods is the gross method and the some other is the solve method. Two online retailers that have been used in the examination of these two methods are Amazon and stock up. ASC guidelines The ASC guidelines recognize two basic accounting methods in the case where one is recognizing revenues. These are the gross method and the dough profit method. The gross method seeks to recognize the total amount of gross revenue that have been made from which each(prenominal) discounts that come on within the time frame opened for discounts are then recorded. These discounts may be accrued in periods. This is where they have occurred in periods that are greater than two accounting periods and where the likely period of payment is not certain. The net method on the other han d records revenue in terms of the net sales that have been made on the product. In the case where later on the customer decides not to squander advantage of any discounts that have been offered then this is recorded as income. Gross method of accounting is one that considers the discounts that may be taken and majorly relies on how good a client is in honoring their obligations to pay. The net method on the other hand looks at the discounts that the customer has not taken advantage of and in like manner on how ineffective the customer may be in honoring their obligations to pay. Amazon Amazon recognizes revenue on its books based on the satisfaction of four factors. The recognition is in addition dependent on the stem of the revenue this is as to whether it is from direct sales or commissions earned. The four factors considered are that thither should be long evidence that there is the intent of conducting business. The next is that the goods have been delivered or the service has been rendered. The selling toll also has to be determinable and fixed. Finally that the collection of the amount is to a certain extent assured. In cases where the price is not easy to determine and Amazon is the primary source of the goods then the net revenue is charged. Subscription fees are accepted as revenues over the life of the subscription. In cases where gift cards have been purchased, they are recognized as revenues when they are used by the customer or when they expire. Amazon is a company that utilizes the net method of revenue recognition. This is evident from the fact that the company recognizes the total revenue that is estimated to stem from any of the proceedings that they make netting any promotional discounts that the products may have. This also nets the rebates that the products may attract and the allowance for any costs that may be involved in returning the goods. The recognition of this revenue is also express to the point where the risk of loss and the title of any product sold have been transferred to the client. Overstock Overstock on the other hand has different revenue recognition procedures. They have a customer dedication program whose revenue is allocated ratably over the period of ownership of the membership card. The revenue from rewards intended for those who are members are recognized when they take advantage of these rewards, when the rewards expires which is usually ninety days after the expiry of membership and when there is a breakage (when the redemption by the customer of rewards is extremely unlikely). There have not been any instances of breakage. The revenues from gift cards are also recognized when they are redeemed or when redemption is highly unlikely from experience. It can be seen