This case pertains to one of the very important issues in financial accounting and reporting: revenue recognition. It's meant to be utilized in a mandatory MBA financial accounting class or in an MBA elective course in Analysis and Financial Reporting. The company is a little unique, yet, in that it not only sells major brand TVs, but also TVs under its own brand that carry a one-year warranty for which the retailer-not the producer-is responsible.
The company also provides an additional two-year warranty on its TVs that also is the exclusive duty of the retailer. The case asks students to address numerous revenue recognition positions together with the related expenses. These scenarios include a merchandise deal where the sales price also carries a guarantee provision, a "bundle" of a merchandise deal and an extended warranty sale, and a bundle of a merchandise deal and an extended warranty deal where the business has an arrangement to outsource the servicing of its comprehensive warranty service.
PUBLICATION DATE: October 26, 2011 PRODUCT #: UV5247-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
Related Case Solutions & Analyses:
Glossary of Municipal Finance Terms
Estonia Airs Big Buy
Daniel Kims Dilemma (B)
Opportunity International: Measurement and Mission
Jills Table: Set to Serve
Shurgard Self-Storage: Expansion to Europe
The AmeriCorps Budget Crisis of 2003 (A): Why the National Service Movement Faced Cutbacks and How it Responded
Apax Partners and Xerium S.A.
STAND-ALONE VALUE OF HBO
Bonnie Road
