accounting tag questions
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Can the gross profit margin in an income statement exceed 100 percent?
I am reviewing financial projects from a technology start up. They show the gross profit margin as high as 118%. In some years it is less than 100%. Is the...5028 views2 answers1 star -
Capitalize or expense software development costs?
We have an internal software development team. They develop new products, but they also maintain existing products. What costs get capitalized? Does all de...1522 views1 answer2 stars -
How to structure an earn out for the acquisition of a private company?
We are would like to buy our first small business. The seller said that he is "open to an earn out." The company is a subchapter C corporation, but this iss...1542 views1 answer2 stars -
How do I recognize revenue from a contract with auto-renewal extensions that can be canceled?
The contract is a 3 year contract with 3 one-year automatic renewals - payment for a full year due at the beginning of each year of the contract. The renewal pe...1614 views1 answer3 stars -
Should I match commission expenses to related revenue or book them when sales rep is actually paid?
Selling annual software subscriptions. Customer pays full year upfront - subscription revenue recognized ratably over the year. Sales rep gets paid within 30 da...1090 views1 answer1 star -
Big corporations product costing methods
I am doing a research paper on ExxonMobil and the methods their managers use for product costing. On ExxonMobil's SEC filings, they use Absorption costin...1548 views1 answer0 stars -
Why is the royalty payment under our contract not considered a royalty for tax purposes?
We provide services to customers using a product sold by a company we are partnering with. We negotiated a contract where we provide those services at a red...1057 views1 answer0 stars -
How to calculate Return on Invested Capital ROIC?
We are working on an acquisition. My boss wants me to calculate the Return on Invested Capital (ROIC) for the target company. She does not want me to calcul...1453 views2 answers1 star -
What are the difference between IFRS and GAAP?
More particularly, when is IFRS used for accounting guidance and when is GAAP used? What are the regulatory implications?1297 views1 answer1 star -
Is the value of assets on the balance sheet a good estimate of market value?
Do companies reflect the market value of their assets on the balance sheet? If not, how are asset values shown on a company's balance sheet determined?1159 views0 answers0 stars -
How to account for professional services fee revenue?
We have a small consulting business. Our clients pay upfront for our services and we provide those services at the clients request sometimes in the same mon...1415 views0 answers0 stars