Accounting for the iPhone at Apple Inc.

Posted: 18 Feb 2012

See all articles by Francois Brochet

Francois Brochet

Boston University - Department of Accounting

Krishna Palepu

Harvard University - Harvard Business School; Harvard University - David Rockefeller Center for Latin American Research; Harvard Business Review; NBER; International Academy of Management

Lauren Barley

affiliation not provided to SSRN

Date Written: February 24, 2011

Abstract

Apple initially recognized revenue associated with its iPhone product using subscription accounting. However, in 2008, the company started providing non-GAAP supplemental numbers where substantially all of the revenue was recognized upfront. Market participants' reactions to the disclosure were mixed. Was Apple "right" in arguing that subscription accounting was inadequate for the iPhone?

Learning Objective: The case provides an opportunity to discuss criteria for revenue recognition in the context of multiple deliverables. It also serves to illustrate the interactive nature of the standard setting process.

Suggested Citation

Brochet, Francois and Palepu, Krishna and Barley, Lauren, Accounting for the iPhone at Apple Inc. (February 24, 2011). Harvard Business School Accounting & Management Unit Case No. 111-003, Available at SSRN: https://ssrn.com/abstract=2007102

Francois Brochet (Contact Author)

Boston University - Department of Accounting ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Krishna Palepu

Harvard University - Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States
617-495-6759 (Phone)
617-496-7363 (Fax)

HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=pub&facId=6527

Harvard University - David Rockefeller Center for Latin American Research ( email )

1730 Cambridge St.
Cambridge, MA 02138
United States

HOME PAGE: http://www.drclas.harvard.edu/faculty/directory/professors/view/150

Harvard Business Review ( email )

Boston, MA
United States

HOME PAGE: http://hbr.org/authors/palepu

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://www.nber.org/people/krishna_palepu

International Academy of Management ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

HOME PAGE: http://theiam.ws/?person=palepu-krishna

Lauren Barley

affiliation not provided to SSRN ( email )

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