![]() ![]() Revenue for retail packaged products, products licensed to original equipment manufacturers ("OEMs"), and perpetual licenses under certain volume licensing programs generally is recognized as products are shipped or made available. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectibility is probable. ![]() Translation adjustments resulting from this process are recorded to Other Comprehensive Income ("OCI"). Revenue and expenses are translated at average rates of exchange prevailing during the year. Foreign CurrenciesĪssets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Actual results and outcomes may differ from management's estimates and assumptions. Examples of assumptions include: the elements comprising a software arrangement, including the distinction between upgrades or enhancements and new products when technological feasibility is achieved for our products the potential outcome of future tax consequences of events that have been recognized in our financial statements or tax returns and determining when investment impairments are other-than-temporary. Examples of estimates include: loss contingencies product warranties the fair value of, and/or potential goodwill impairment for, our reporting units product life cycles useful lives of our tangible and intangible assets allowances for doubtful accounts allowances for product returns and stock-based compensation forfeiture rates. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Investments through which we are not able to exercise significant influence over the investee and which do not have readily determinable fair values are accounted for under the cost method. Equity investments through which we exercise significant influence over but do not control the investee and are not the primary beneficiary of the investee's activities are accounted for using the equity method. ![]() Intercompany transactions and balances have been eliminated. The financial statements include the accounts of Microsoft Corporation and its subsidiaries. The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. This series of transactions effectively shifts all of the initial expenditure into the expense account over the period when the bonds are outstanding.Accounting Policies NOTES TO FINANCIAL STATEMENTS NOTE 1 - ACCOUNTING POLICIES Accounting Principles Later, it charges $5,000 to expense in each of the next 10 years, with a debit to the bond issuance expense account and a credit to the bond issuance costs account. Accordingly, ABC initially capitalizes the bond issue costs, with a debit to the bond issuance costs account and a credit to the cash account. Example of Bond Issuance Costsįor example, ABC International incurs $50,000 to issue bonds. An alternative treatment when bond issuance costs are immaterial is to charge them to expense as incurred. ![]() We use this accounting treatment because, under the matching principle, we recognize expenses at the same time that we recognize the benefits associated with those expenses - thus, the benefit of having the bonds outstanding in any given year is matched with a portion of the original bond issue cost. The amount of bond issuance costs charged to expense appears in the income statement in the period in which the charge is recognized. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |