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Case Study Apple Inc. is a multinational technology company based in California, USA. It is one of the most successful startups in US history and is currently one of the largest IT companies in the world. The company is widely known for its branded products such as the iPhone, iPad, and personal computers. But aside from being a consumer electronics company, it also provides software and digital services to Apple ecosystem users. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon thesis/1081. Last Accessed on April 20, 2022 Revenue Recognition: Apple Inc. 0 19 Case Study Since Apple sells a variety of services and goods, proper recognition of revenues is a must. This is where ASC 606 is given much importance, since it lays out how companies should recognize revenue. In addition, ASC 606 is an American standard where the IFRS 15 (Revenue Recognition) is an international counterpart widely used in other countries, such as the Philippines. However, since Apple is based in the United States, it is prompt for them to follow ASC 606. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, 2022 Revenue Recognition: Apple Inc. Case Study According to ASC 606, to recognize revenue a company must: identify the contract with the customer, identify the performance obligations, determine the transaction price, allocate the price to the obligations, and once the performance obligation is satisfied, the company can recognize revenue. With this, it is important for Apple to properly follow the guidelines set forth by ASC 606 to account their transactions in a sound manner. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, 2022 21

Case Study Apple Inc. is a multinational technology company based in California, USA. It is one of the most successful startups in US history and is currently one of the largest IT companies in the world. The company is widely known for its branded products such as the iPhone, iPad, and personal computers. But aside from being a consumer electronics company, it also provides software and digital services to Apple ecosystem users. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon thesis/1081. Last Accessed on April 20, 2022 Revenue Recognition: Apple Inc. 0 19 Case Study Since Apple sells a variety of services and goods, proper recognition of revenues is a must. This is where ASC 606 is given much importance, since it lays out how companies should recognize revenue. In addition, ASC 606 is an American standard where the IFRS 15 (Revenue Recognition) is an international counterpart widely used in other countries, such as the Philippines. However, since Apple is based in the United States, it is prompt for them to follow ASC 606. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, 2022 Revenue Recognition: Apple Inc. Case Study According to ASC 606, to recognize revenue a company must: identify the contract with the customer, identify the performance obligations, determine the transaction price, allocate the price to the obligations, and once the performance obligation is satisfied, the company can recognize revenue. With this, it is important for Apple to properly follow the guidelines set forth by ASC 606 to account their transactions in a sound manner. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, 2022 21

Financial Accounting
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter5: Accounting Systems
Section: Chapter Questions
Problem 3CP
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Revenue Recognition: Apple Inc. Case Study Apple Inc. is a multinational technology company based in California, USA. It is one of the most successful startups in US history and is currently one of the largest IT companies in the world. The company is widely known for its branded products such as the iPhone, iPad, and personal computers. But aside from being a consumer electronics company, it also provides software and digital services to Apple ecosystem users. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, 2022 19 Revenue Recognition: Apple Inc. Case Study Since Apple sells a variety of services and goods, proper recognition of revenues is must. This is where ASC 606 is given much importance, since it lays out how companies should recognize revenue. In addition, ASC 606 is an American standard where the IFRS 15 (Revenue Recognition) is an international counterpart widely used in other countries, such as the Philippines. However, since Apple is based in the United States, it is prompt for them to follow ASC 606. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, 2022 Revenue Recognition: Apple Inc. Case Study According to ASC 606, to recognize revenue a company must: identify the contract with the customer, identify the performance obligations, determine the transaction price, allocate the price to the obligations, and once the performance obligation is satisfied, the company can recognize revenue. With this, it is important for Apple to properly follow the guidelines set forth by ASC 606 to account their transactions in a sound manner. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, 2022 21
Transcribed Image Text:Revenue Recognition: Apple Inc. Case Study Apple Inc. is a multinational technology company based in California, USA. It is one of the most successful startups in US history and is currently one of the largest IT companies in the world. The company is widely known for its branded products such as the iPhone, iPad, and personal computers. But aside from being a consumer electronics company, it also provides software and digital services to Apple ecosystem users. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, 2022 19 Revenue Recognition: Apple Inc. Case Study Since Apple sells a variety of services and goods, proper recognition of revenues is must. This is where ASC 606 is given much importance, since it lays out how companies should recognize revenue. In addition, ASC 606 is an American standard where the IFRS 15 (Revenue Recognition) is an international counterpart widely used in other countries, such as the Philippines. However, since Apple is based in the United States, it is prompt for them to follow ASC 606. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, 2022 Revenue Recognition: Apple Inc. Case Study According to ASC 606, to recognize revenue a company must: identify the contract with the customer, identify the performance obligations, determine the transaction price, allocate the price to the obligations, and once the performance obligation is satisfied, the company can recognize revenue. With this, it is important for Apple to properly follow the guidelines set forth by ASC 606 to account their transactions in a sound manner. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, 2022 21
Revenue Recognition: Apple Inc. Case Study This gives every sale transaction a correct method of accounting. For example, every iPhones sold comes with a free phone warranty and free access to AppleTV+, Apple Arcade, and Apple Music ranging from 3 months to 1 year. Telecommunications companies also make transactions more complex through inclusion of postpaid plans. A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, 2022 22 Quipper Revenue Recognition: Apple Inc. a Case Study This only signifies that knowing the nature of a business and observing proper accounting standards is critical to simplify financial information, give ease to customers, and provide confidence to investors, which later contributes to the success of a company. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, Questions for reflection nd analysis 2022 Case Study 23 1. Why is proper recognition of revenues important for companies like Apple? 2. How does ASC 606 impact the accounting practices of companies like Apple? 3. What role do proper accounting standards play in simplifying financial information for companies like Apple?
Transcribed Image Text:Revenue Recognition: Apple Inc. Case Study This gives every sale transaction a correct method of accounting. For example, every iPhones sold comes with a free phone warranty and free access to AppleTV+, Apple Arcade, and Apple Music ranging from 3 months to 1 year. Telecommunications companies also make transactions more complex through inclusion of postpaid plans. A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, 2022 22 Quipper Revenue Recognition: Apple Inc. a Case Study This only signifies that knowing the nature of a business and observing proper accounting standards is critical to simplify financial information, give ease to customers, and provide confidence to investors, which later contributes to the success of a company. Quipper A Compilation of Accounting Case Studies Smith, Madelyn, "A Compilation of Accounting Case Studies" (2019). University of Mississippi. Honors Theses. 1081. https://egrove.olemiss.edu/hon_thesis/1081. Last Accessed on April 20, Questions for reflection nd analysis 2022 Case Study 23 1. Why is proper recognition of revenues important for companies like Apple? 2. How does ASC 606 impact the accounting practices of companies like Apple? 3. What role do proper accounting standards play in simplifying financial information for companies like Apple?
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