To: CecilRhodesGhost
Exactly. Halliburton does amazingly complicated work. And always the attacks come from people who have no experience in the real world, as if they are clean. Clean only because they have never built, managed or operated anything producing goods or services from which people benefit or gain employment. However, the booking of revenue not yet realized, ala Merck, does get me to wonder why accountants advise that these can be booked somehow. I wish someone could provide understanding as to why from an accounting standpoint, this is OK. Clearly, cost over-runs on construction projects cannot be realized until approved by the client. Perhaps there is some contract language allowing this, but without a clients pre-approval, it seems at least risky and likely fraudulent.
16 posted on
07/10/2002 11:29:55 AM PDT by
Sigurd
To: Sigurd
Clearly, cost over-runs on construction projects cannot be realized until approved by the client. Perhaps there is some contract language allowing this, but without a clients pre-approval, it seems at least risky and likely fraudulent.The JW suit claims just that. I just read the JW briefs on the other thread and am reserving judgement until I get some legal and GAAP opinions from those in the know.
33 posted on
07/10/2002 12:19:34 PM PDT by
LisaFab
To: Sigurd
There are 3 general types of service contracts - Time & Materials, Not to Exceed, and Fixed Price. If it's a Time and Material contract, then cost overruns are absorbed by the customer (unless there is pre-approval language and approvals were not properly obtained). For both Fixed Price and Not to Exceed contracts - the cost overruns are absorbed by the contractor. T&M contracts book revenue as you go.
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson