1. Briefly analyze ONE of the three cases in the reading. (e.g., Hotel Capri should report its revenue as gross revenue based on the several indicators in the reading...)

2. Try to find other examples of the "Reporting Net vs. Gross Revenue" OR make your own story -> Share your judgment and grounds. Remember, there is NO right or wrong answer!

 

Transcribed Image Text:

Hotel Azul has an audio visual department in house with a full staff and a supervisor for that area who Azul's own human resources department hires. Azul sets all the prices from easels to screens to overheard projectors. All revenues are billed with all other hotel billings. While Azul reaps all the benefits and are not sharing the AV revenue with any outside party, it also bears all the risk if clients do not pay. Analysis: Hotel Azul is the primarily obligor (indicator #1 for gross reporting). Hotel Azul has credit'collection risk (indicator #2 for gross reporting). Hotel Azul is primarily responsible for the fulfillment of the service and product (indicator #3 of gross reporting). Hotel Azul has control over the establishment of the price (indicator #5 of gross reporting). Hotel Azul provides a significant portion of the service, they hire and train all AV employees, and clients have the right to return the product or service if they are not up to standard (indicator #6 of gross reporting). Decision: Categorically Gross Revenue Reporting. Hotel Azul has total control and absorbs any risks and loss. Hotel Azul has an audio visual department in house with a full staff and a supervisor for that area who Azul's own human resources department hires. Azul sets all the prices from easels to screens to overheard projectors. All revenues are billed with all other hotel billings. While Azul reaps all the benefits and are not sharing the AV revenue with any outside party, it also bears all the risk if clients do not pay. Analysis: Hotel Azul is the primarily obligor (indicator #1 for gross reporting). Hotel Azul has credit'collection risk (indicator #2 for gross reporting). Hotel Azul is primarily responsible for the fulfillment of the service and product (indicator #3 of gross reporting). Hotel Azul has control over the establishment of the price (indicator #5 of gross reporting). Hotel Azul provides a significant portion of the service, they hire and train all AV employees, and clients have the right to return the product or service if they are not up to standard (indicator #6 of gross reporting). Decision: Categorically Gross Revenue Reporting. Hotel Azul has total control and absorbs any risks and loss.

Answer rating: 100% (QA)

Hotel Azul should reports all his net revenue in both the buiseness Hotel Azul runs two buiseness in ... View the full answer