Kapstone Paper and Packaging recorded notes dealing with their current assets, intangibles, consolidations, and revenue recognition. The notes for current assets talk about their cash and cash equivalents, trade accounts receivables, and inventories and describe what each mean to the company. According to the notes, the intangible assets are labeled as goodwill or other intangible assets. The notes about consolidations describe how the consolidated financial statements are prepared and adjusted. Finally, the conditions of revenue recognition are defined and the point at which revenue is recognized is also elaborated upon. These notes help investors to see how the company operates and how the company defines specific points.
The cash and cash …show more content…
The notes state that the consolidated financial statements are prepared on an accrual basis and in compliance with Generally Accepted Accounting Principles (GAAP). The financial statements include the accounts the company uses, as well as its subsidiaries, and have been adjusted to create an honest representation of the company. One of the adjustments made was the removal of any significant intercompany accounts and transactions. In the past couple of years, Kapstone has also acquired some outside companies. The effects of those acquisitions on the related accounts are also reflected in the company’s financial …show more content…
Before revenue is recognized, the title of ownership must be transferred to the customer and the prices of services and products must be “fixed and determinable and collectability reasonably assured” (p. 53). Once these two conditions are met, the company can then recognize revenue. When an item is labeled free on board (F.O.B) shipping point, revenue is recognized when the item is shipped. When it is labeled F.O.B. destination, revenue is then recognized when the customer actually receives the product. If the item is sold on consignment, revenue is recognized at the beginning of the month the goods are sold or after a period of time after the customer receives the product from the consignee. The notes on revenue recognition also talk about how rebates are netted against revenue on an accrual basis only if the customer who made the purchase qualifies for the rebate. Finally, customers will assume freight charges and those charges are included in net
The cash and cash …show more content…
The notes state that the consolidated financial statements are prepared on an accrual basis and in compliance with Generally Accepted Accounting Principles (GAAP). The financial statements include the accounts the company uses, as well as its subsidiaries, and have been adjusted to create an honest representation of the company. One of the adjustments made was the removal of any significant intercompany accounts and transactions. In the past couple of years, Kapstone has also acquired some outside companies. The effects of those acquisitions on the related accounts are also reflected in the company’s financial …show more content…
Before revenue is recognized, the title of ownership must be transferred to the customer and the prices of services and products must be “fixed and determinable and collectability reasonably assured” (p. 53). Once these two conditions are met, the company can then recognize revenue. When an item is labeled free on board (F.O.B) shipping point, revenue is recognized when the item is shipped. When it is labeled F.O.B. destination, revenue is then recognized when the customer actually receives the product. If the item is sold on consignment, revenue is recognized at the beginning of the month the goods are sold or after a period of time after the customer receives the product from the consignee. The notes on revenue recognition also talk about how rebates are netted against revenue on an accrual basis only if the customer who made the purchase qualifies for the rebate. Finally, customers will assume freight charges and those charges are included in net