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Chapter 19: Earnings Quality and Revenue Recognition

In this section

  • Persistent vs. Transitory Earnings
    Distinguish between recurring earnings and one-off items, understand their impact on perceived profitability, and learn how to adjust financials for better comparability.
  • Timing and Criteria for Revenue Recognition
    Master the five-step model under IFRS 15 and ASC 606, explore industry-specific complexities, and discover how revenue timing shapes earnings quality.
  • Channel Stuffing, Bill-and-Hold, and Red Flags
    Explore the complexities of channel stuffing and bill-and-hold arrangements, recognizing red flags and analyzing potential financial misrepresentations.
  • Practice Vignette: Distorted Revenues
    Explore a realistic scenario detailing questionable revenue recognition practices, focusing on bill-and-hold arrangements, channel stuffing, and end-of-quarter sales surges under IFRS 15 and ASC 606.
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Chapter 18: Evaluating Reporting Quality—Overview
Chapter 20: Balance Sheet Quality