1. Do you think that Apple’s new accounting policy, that is consistent with the 2009 FASB statement, results in fair financial reporting?
2. Do you think that Apple’s share price should have gone up as a result of increased revenue due to a change in an accounting policy?
Numerous firms, including computer and communication companies, sell products that have multiple deliverables. For example, a telephone company may sell a customer a phone and a two-year unlimited long-distance telephone call package for a lump sum. How should the company account for the lump sum that it receives? Accounting rules required that the vendor allocate the lump sum between the two deliverables, separating the revenue from the sale of the hardware from the revenue from the sale of the service.