Reciprocal agreement

Assignment Help Financial Management
Reference no: EM131844031

Lookhere.Com and StopIn.Com enter into a reciprocal agreement whereby (1) StopIn.Com is given valuable advertising space on the home page of Lookhere.Com and (2) Lookhere.Com is given valuable advertising space on the home page of StopIn.Com. The main source of revenue for both StopIn.Com and Lookhere.Com is sales of advertising on their respective websites. Both companies recognize advertising revenue received from the other company and recognize advertising expense paid to the other company. Accounting regulators express support for the accounting treatment applied by these companies.

Required:

1. Do you believe these companies should be allowed to recognize revenue in conjunction with the advertising agreements described above?

2. Why do you believe these companies want to record revenue along with its offsetting expense for these transactions?

3. How would you assess such transactions in an analysis of these companies?

Reference no: EM131844031

Questions Cloud

Potential sales of new development project : Suppose that you have begun to gather some demographic data in order to project the potential sales of a new development project.
Developer is interested in building new apartment community : Suppose a developer is interested in building a new apartment community. how many units does she plan on selling by the end of year 5?
What would the cost of equity be if the debt-equity ratio : What would the cost of equity be if the debt-equity ratio were 2? What would the cost of equity be if the debt-equity ratio were 1.0?
Compute the present value of the remaining loan : The remaining time left to compute the present value (called balance) of the remaining loan.
Reciprocal agreement : Lookhere.Com and StopIn.Com enter into a reciprocal agreement whereby (1) StopIn.Com is given valuable advertising space on the home page of Lookhere.Com
What is the company current stock price : A company just paid a dividend of $0.80 per share, What is the company's current stock price?
Bradley industries has two separate divisions : Bradley Industries has two separate divisions. Division X has less risk so its projects are assigned a discount rate equal to the firm's WACC minus 0.75 percent
What is the portfolio position delta : What is the portfolio position delta? What is the portfolio value after the stock price changed?
What is the project year one net cash flow : What is the project's year 0 net cash flow? What is the project's year 1 net cash flow? What is the NPV?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd