General
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EBITDA
Investopedia.com provides a definition and explanation of EBITDA. This Web site also has links to definitions of all the related terms, and an article from The Motley Fool on the limitations of EBITDA.
Venture Coach calls EBITDA "a Phantom Measurement".
ComputerWorld had a recent article on the 10 critical failings of EBITDA.
FAS 133
FAS 133 is the accounting standard that provides guidance on reporting for derivatives and hedges. FAS133.com is a Web portal and resource devoted to helping financial executives implement and maintain on-going compliance with the standard. Access to its information is available on a subscription basis.
FEI Research Foundation Products: Corporate Reporting of Nonfinancial Performance Indicators, February 2002
Quality of Financial Reporting (Also see Sarbanes-Oxley)
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Pro Forma Reporting
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Revenue Recognition
For technical information related to revenue recognition, reference Statement of Financial Accounting Standards (SFAS) 48, "Revenue Recognition When Right of Return Exists." Also refer to SAB 101, issued by the SEC staff on December 3, 1999.
According to SAB 101, "The staff believes that revenue generally is realized or realizable and earned when all of the following criteria are met:
- Persuasive evidence of an arrangement exists
- Delivery has occurred or services have been rendered
- The seller's price to the buyer is fixed or determinable
- Collectibility is reasonably assured.6"
SEC Staff Accounting Bulletin (SAB) 101 was issued to summarize certain of the SEC staff's views in applying generally accepted accounting principles to revenue recognition in financial statements.
When right of return exists, consider the following guidance when determining the appropriate revenue recognition policy:
According to Footnote 6, Accounting Research Bulleting #43, Chapter 1, paragraph 1:
"1. Unrealized profit should not be credited to income account of the corporation either directly or indirectly, through the medium of charging against such unrealized profits amounts which would ordinarily fall to be charged against income account. Profit is deemed to be realized when a sale in the ordinary course of business is effected, unless the circumstances are such that the collection of the sale price is not reasonably assured. An exception to the general rule may be made in respect of inventories in industries (such as packing-house industry) in which owing to the impossibility of determining costs it is a trade custom to take inventories at net selling prices, which may exceed cost."
And APB Opinion #10, paragraph 12, "Installment Method of Accounting":
"12. Chapter 1A of ARB No. 43, paragraph 1, states that "Profit is deemed to be realized when a sale in the ordinary course of business is effected, unless the circumstances are such that the collection of the sale price is not reasonably assured." The Board reaffirms this statement; it believes that revenues should ordinarily be accounted for at the time a transaction is completed, with appropriate provision for uncollectible accounts. Accordingly, it concludes that, in the absence of the circumstances 8 referred to above, the installment method of recognizing revenue is not acceptable."
KPMG has prepared an analysis of how draft EITF Consensus on "Multiple Deliverables" would change revenue recognition.
XBRL
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Corporate Reporting and the Internet-Understanding- and Using- XBRL, September 2002