Andy,
Regarding your post #851, could you clarify a few things.
You said, "even though earnings were great in 1Q 1996, all of the
"net income" portion was in the form of Receivables". I repeat
"net income" not "revenue" or "sales."
It's possible that this may just a missundertanding on my part of the terminology that you are using.
I am an accountant that has worked in the area of "financial reporting" for a fortune 500 company for 10 yrs.
It is my understanding:
1.) A company may recognize revenues when "the earnings process is
substantially complete". Basically, this means, (unless there is an industry practice to the contrary) if Cube manufactured and delivered the goods, and someone has entered into a contract to purchase them, they can recognize/report those revenues.
2.) If the customer has not paid for those goods yet (the "Receivable" is irrelevant), UNLESS,the collectibility of the cash is in question. A good example of this was the Receivable on Intel's books from the alleged Packard Bell. Intel may, if they have not already, have to take a hit to the bottom line due to this uncollectibility.
3.) If there is a write off due to a "non recurring item", Wall Street
doesn't give a damn.
Pleae clarify your post.
Thanks,
Steve |
