I conduct an examination of the deferred revenue account. I provide descriptive evidence of deferred revenue both at an industry-level and a macro-level, and I examine whether managers use discretion in deferred revenue around earnings benchmarks. I develop a model to measure the normal change in short-term deferred revenue, and examine how the abnormal change varies across the pre-managed distribution of three common earnings benchmarks. My results show that managers delay recognition of revenue using deferred revenue when pre-managed earnings exceed benchmarks by a large margin, and accelerate the recognition of revenue using deferred revenue when premanaged earnings just miss or miss benchmarks by a large amount. I document the prevalence of accelerated revenue recognition, and show that meeting or just beating the annual consensus analyst forecast is where the most cases of suspected accelerated revenue recognition occur. The results are next strongest for the avoidance of earnings decrease benchmark and weakest for the avoidance of loss benchmark. I examine whether conventional abnormal accrual models reflect discretion in deferred revenue, and whether discretion in deferred revenue is associated with lower earnings quality. I show that deferred revenue changes are a leading indicator of future earnings. My results indicate that discretion in revenue can lower the predictability of sales regardless of whether it is of an aggressive or conservative nature.

Thesis (MComm (Logistics))--University of Stellenbosch, 2011. / ENGLISH ABSTRACT: Mobile phone networks form an integral part of economic and social development globally. Mobile phones have become an everyday part of life and it is hard to imagine a competitive economy without the availability of mobile communications. Emerging markets benefit most from the implementation of mobile technology and growth trends are outperforming earlier predictions. The most popular and sustainable payment model used by mobile phone networks in emerging markets is the pre paid mechanism used for the distribution of airtime. This mechanism brings about unique challenges for networks in emerging markets. In this thesis the importance of the mobile phone network pre paid value channel is introduced through an analysis of pre paid revenue. A brief introduction is given to the systems and products that contribute to the functioning of the pre paid value channel. The revenue generation process is described with regards to the pre paid sector of the market and an in-depth explanation of the importance of deferred revenue is given, how it is recorded and what role it fulfils in the generation of revenue. The complexity of the network environment, both technical and operational makes the use of a business automation and support system (BSS) a necessary tool for effective execution of tasks and processes within the network environment. These systems record information from a wide spectrum of available technical network resources and use this information to automate the flow of network products. The use of such a system for the calculation of deferred revenue is suggested. Saaty‟s Analytical Hierarchy Process (AHP) algorithm and the Elimination and Choice Expressing Reality (ELECTRE) method are used to compare the newly proposed method for the calculation of deferred revenue using a BSS. Using Saaty's algorithm to estimate the effectiveness of deferred revenue as reported through the use of a BSS yields favourable results for the proposed method. This helps to bridge the gap in the poorly researched mobile telecommunications industry. ELECTRE is used to substantiate the findings of the model using AHP and meaningful tests are done to motivate correctness and accuracy of the results obtained throughout. Most importantly, the findings were shared with academic and industry experts, adding meaningful resemblance to the goals set out to achieve. / AFRIKAANSE OPSOMMING: Mobiele foon netwerke is wêreldwyd 'n onlosmaakbare deel van ekonomiese en sosiale ontwikkeling. Mobiele fone is deel van ons alledaagse lewe en dit is moeilik om 'n kompeterende ekonomie te bedink sonder die beskikbaarheid van mobiele kommunikasie. Ontluikende markte trek die meeste voordeel uit die implementering van mobiele tegnologie en groeitendense vertoon beter as wat vroeër voorspel is. Die mees gewilde en volhoubare betaalmetode wat deur mobiele foon netwerke in ontluikende markte gebruik word, is die voorafbetalingsmeganisme wat vir die verspreiding van lugtyd gebruik word. Hierdie meganisme bring unieke uitdagings vorendag in ontluikende markte. Die tesis beskryf die belangrikheid van die mobiele foon netwerk voorafbetalingswaardekanaal deur 'n analise te maak van vooruitbetalingsinkomste. 'n Kort oorsig oor die sisteme en produkte wat bydra tot die funksionering van die vooruitbetalingswaardekanaal word verskaf. 'n Beskrywing van die inkomste-genereringsproses vir die vooruitbetaling-sektor van die mark word verskaf en 'n in-diepte verduideliking van die belangrikheid van uitgestelde inkomste, hoe dit vasgelê word en watter rol dit speel in die generering van inkomste word verduidelik. Die kompleksiteit van die netwerkomgewing, beide op 'n tegniese en operasionele vlak, maak die gebruik van 'n besigheidsoutomatisering en ondersteuningsisteem (BSS) 'n noodsaaklike instrument vir die effektiewe uitvoer van take en prosesse binne die netwerkomgewing. Hierdie sisteme stoor informasie vanuit 'n wye spektrum van beskikbare tegniese netwerkbronne en gebruik die inligting om die vloei van netwerkprodukte te outomatiseer. Die gebruik van sodanige sisteem word voorgestel vir die berekening van uitgestelde inkomste. Saaty se Analitiese Hierargie Proses-algoritme (AHP) en die Eliminasie en Realiteit-Deur-Keuse Uitdrukkingsmetode (ELECTRE) word gebruik vir die vergelyking van die voorgestelde metode vir die berekening van uitgestelde inkomste deur middel van 'n BSS. Die gebruik van Saaty se algoritme om die effektiwiteit te bereken van uitgestelde inkomste soos gemeld deur die gebruik van 'n BSS, lewer gunstige resultate vir die voorgestelde metode. Dit vul 'n leemte in die swak nagevorsde mobiele telekommunikasie industrie. ELECTRE word gebruik om die bevindinge van die AHP-model te substansieer en betekenisvolle toetse word deurentyd gedoen om die korrektheid en akkuraatheid van die resultate te motiveer. Die belangrikste aspek van die navorsing is dat die bevindinge gedeel is met kenners binne die akademie sowel as die industrie, wat nou aansluit by die doelstellings wat aanvanklik beoog is.

This master thesis applies to the revenues from the sale of goods and their recognition in accordance with the Czech accounting standards, IAS and US GAAP. Particular chapters contain analysis of chosen problems of merchandise (goods) {--} its definition and pricing, problems of cost and income from the sale. The biggest part of the thesis is deals with the recognition of revenues from the sale of goods. At first were characterised and analysed individual methods of revenues recording, which were usefully completed with a concrete case applied to Czech accounting standards, IAS and US GAAP, with addition of the impact on the trading income of the company.