Acquiring Company Case Study Case Study

Open, View, and/or
Download this Document

Total Length: 704 words ( 2 double-spaced pages)

Total Sources: 2

Page 1 of 2

Acquiring a Company

Over the last several years, globalization has been having profound impact upon how various revenues are being accounted for. This is because there has been a concentrated effort, to create a universal accounting standard that can be utilized around the world. In the case of SolvGen and Careway, this could mean that possible changes may have an impact upon how various revenues are reported. To determine the underlying effect that this will have on both companies requires: examining the deliverables arrangement, when milestone payments should be recognized as revenues and if IFRS changes will have an impact upon the way this is recorded. Together, these different elements will provide the greatest insights, as to how these changes will affect SolvGen and Careway.

What are the deliverables for the arrangement described in the case study above?

Under the agreement the deliverable for SolvGen include: Commercial launch of instrument system Version 1, Commercial launch of instrument system Version 2 and Commercial launch of instrument system Version 3. The deliverables for Careway are the ability to market / distribute the different drugs that are being produced.

Stuck Writing Your "Acquiring Company Case Study" Case Study?

View All Our Example Acquiring Company Case Study Case Study

Have A Custom Example Essay Written

This is important, because it is showing how both companies will have actual products that they will have to account for (based upon multiple streams of revenues). ("Revenue Recognition," 2009) ("Case 10 -1," n.d.)

When should the milestone payments received to date by SolvGen be recognized as revenue?

The different milestone payments should be recognized as revenues in the quarters that the income was received. For example, SolveGen has two milestone payments (the exclusive negotiation payment and contract signing payment). The exclusive negotiation payment was received in December 2005, while the negotiation payment was received in January 2006. As a result, the exclusive negotiation payment would be reflected in the quarterly earnings of the company for the fourth quarter of 2005. The negation payment will be reflected on the first quarter earnings of 2006. This is important, because under FASB guidelines all milestone payments must be reflected in the quarter that they were received (to provide the most accurate information to shareholders and regulators). ("Revenue Recognition….....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Acquiring Company Case Study" (2011, February 24) Retrieved July 1, 2025, from
https://www.aceyourpaper.com/essays/acquiring-company-case-study-4493

Latest MLA Format (8th edition)

Copy Reference
"Acquiring Company Case Study" 24 February 2011. Web.1 July. 2025. <
https://www.aceyourpaper.com/essays/acquiring-company-case-study-4493>

Latest Chicago Format (16th edition)

Copy Reference
"Acquiring Company Case Study", 24 February 2011, Accessed.1 July. 2025,
https://www.aceyourpaper.com/essays/acquiring-company-case-study-4493
   

Open, View, and/or
Download this Document
order custom essay example