Business Case Studies & Business Publications

Revenue Recognition Challenges at Lemnos...

Naughton, James

Case

Revenue Recognition Challenges at Lemnos Industries

Naughton, James

C-2469 | Published July 22, 2024 | 4 Pages Case

Collection: Darden School of Business

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Learning Objectives

The Financial Accounting Standards Board (FASB) principles for recognizing revenue from contracts with customers are provided in Accounting Standards Codification Topic 606 (ASC 606). This case outlines the five-step revenue recognition process introduced by ASC 606 and provides students with five hypothetical examples to structure discussion and highlight gray areas within ASC 606. At the University of Virginia Darden School of Business, this case is used in the first-year Core Financial Accounting course. It would also be suitable in courses covering intermediate financial accounting topics.

Through the discussions of each transaction, students will better understand the discretion that is involved in the financial reporting of revenue. As such, this case will prepare students for more advanced case studies that focus on issues related to earnings quality.