Buy custom Informix Revenue Recognition
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Topic: |
Business
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Number of pages / Number of words: |
22 / 6025 |
Essay's paper body
The nonrefundable license fee contracts were recognized at contract signing thereby deviating from FASB's inference and thus violating GAAP's Conservatism Principal. The revenues recognized at the time of contract signing were neither realized nor earned, which led to an overestimate of Net Income in Informix's financial statements...
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Thus, the company failed to match the accomplishments with the expenses, which also resulted in the overstatement of accounts receivables.
Informix's financial statements indicated a significant increase in net income (22.8% on 40.1% increase in revenues) and accounts receivables (28.4%) in 1989 from 1988...
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