This requirement aims to develop student skills to (a) identify, interpret, and apply the U.S. authoritative literature1 and (b) understand the importance of characterization of an item as revenue or expense even if either treatment has an identical income effect.

It is inappropriate for the Company to include the entire membership proceeds of $7,200,000 in the revenues of fiscal 2008. The support for this position comes from Staff Accounting Bulletin (SAB) No. 104 of the SEC (2003).2 Topic 13.4.a (refundable fees for services) of SAB No. 1043 states that the earnings process is not complete because of the Company's remaining and unfulfilled contractual obligation to perform services. This argument is bolstered by the fact that the Company has initiated the Super Rewards Program only in 2008 and thus has no basis to estimate the likely refunds from the “complete satisfaction” guarantee given to SRP members. Some students...

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