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Sale/leaseback accounting has been tightened. The transaction must meet the needs for a sale in FASB Topic 606 (IAS 15), the revenue recognition standard. If there is a fixed-price acquire selection, sale/leaseback therapy is not permitted unless the lessee does not manage the asset at the time of the transaction and is acting as an agent for the original owner. If the leaseback qualifies as a finance lease, then no sale/leaseback has occurred. A failed sale/leaseback remains on the lessee’s books as an asset with the leaseback accounted for as debt.
Bernard L. Madoff Investment Scandal – this perpetrated the Ponzi scheme that robbed millions of men and women of their tough-earned cash. It is acclaimed as the largest investment fraud ever committed by an individual. The scandal right here is not in Madoff, himself (despite the fact that he would have engaged in improper accounting practices to hide the fraudulent scheme), but on how such scheme escaped the watchful eyes of the auditors and the regulators. Although Madoff has currently pleaded guilty to such charges, the investigations on the involvement of other people and how regulators failed to detect the scheme are still ongoing. The quantity of fraud? Estimated to be about $10 billion to $17 billion.
In expense accounting, 1 has to deal with Direct Fees (Direct Material and Direct Labor) and Manufacturing Overhead. The latter is known as a frequent price and has to be shared by different items or method. It poses a problem of allocation or assignment. With the aid of expense code for each expense, utilizing alphabetic or numerical approach, this allocation is facilitated.