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subject :assignment give me the answer Problem 4 10 marks Refer to the following excerpts from Apple Inc.'s 2019 Annual Report. The excerpts discuss their
subject :assignment give me the answer
Problem 4 10 marks Refer to the following excerpts from Apple Inc.'s 2019 Annual Report. The excerpts discuss their revenue recognition and warranty costs recognition policy. Revenue Recognition The Company has identified up to three performance obligations regularly included in arrangements involving the sale of iPhone, Mac, iPad and certain other products. The first performance obligation, which represents the substantial portion of the allocated sales price, is the hardware and bundled software delivered at the time of sale. The second performance obligation is the right to receive certain product-related bundled services, which include iCloud, Siri and Maps. The third performance obligation is the right to receive, on a when-and-if-available basis, future unspecified software upgrades relating to the software bundled with each device. The Company allocates revenue and any related discounts to these performance obligations based on their relative stand-alone selling prices ("SSPs"). Because the Company lacks observable prices for the undelivered performance obligations, the allocation of revenue is based on the Company's estimated SSPs. Revenue allocated to the product-related bundled services and unspecified software upgrade rights is deferred and recognized on a straight-line basis over the estimated period they are expected to be provided. Warranty Costs The Company offers limited warranties on its new hardware products and on parts used to repair its hardware products, and customers may purchase extended service coverage, where available, on many of the Company's hardware products. The Company accrues the estimated cost of warranties in the period the related revenue is recognized based on and projected warranty claim rates, historical and projected cost per claim and knowledge of specific product failures outside the Company's typical experience. The Company regularly reviews these estimates and adjusts the amounts as necessary. If actual product failure rates or repair costs differ from estimates, revisions to the estimated warranty liabilities would be required. Based on the information provided, justify if you think they follow aggressive or conservative accounting policies. Limit your answer within 120 words
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