Justin Denman
Accounting and Auditing Processes
March 4, 2000
Writing Assignment #1
Revenue Recognition Policies
The purpose of this paper is to compare the revenue recognition policies of
two companies in the search, detection, navigation, guidance, and
aeronautical systems industry. The two companies I have selected are
Aerosonic Corporation, and Esco Electronics Company.
Esco Electronics Company is engaged in the design, manufacture, sale and
support of engineered products. These products are used principally in
filteration/fluid flow applications, electromagnetic compatibility (EMC)
testing, and electric utility communications and control systems. The
filtration/fluid flow and EMC testing products are supplied to a broad base
of industrial and commercial customers worldwide. At the present time,
electric utility communications systems are marketed primarily to customers
in North America. The four primary industry segments of Esco are
Filtration/Fluid Flow, Test, Communications, and other.
In order for Esco to conform with generally accepted accounting principles,
management must make careful estimates in preparing the financial
statements. These estimates are for anticipated contract costs and revenues
earned during the life of the contract ...