Replies to post #11865 on Sorrento Therapeutics Inc (SRNE)

[nsomniyak]

You are right, you’re no accountant. :-)

Neither am I, but here is my understanding of how it works. When you make a sale you record the revenue on your income statement and create a receivable on your balance sheet. When you actually collect that money you clear the receivable and credit cash. With certain types of software sales you have Revenue recognition issues related to maintenance paid upfront, but that shouldn’t be the case here. In SRNE’s case, they should show revenue when they make the sale.

[1776club]

Well a Smoked Pork Chop at Wente for you my friend. That is the thought and the HOPE for the 15th to learn COVISTIX has been shipped and is BEING shipped by the Millions. There are a lot of thoughts I have about management but them being crazy is not one of them.
Revenue can be recognized when:
1)Persuasive evidence that an “agreement” exists between the supplier and the customers – such as a purchase order, a filled online order form or a receipt. (COMPANIES HAVE SENT trusted EMPLOYEES home with hundreds of thousands of dollar's of goods so as to count them as shipped and add that to the quarterly figures. Returned and shipped within 1 to 3 days)
The accounting guideline requiring that revenues be shown on the income statement in the period in which they are earned, not in the period when the cash is collected. This is part of the accrual basis of accounting (as opposed to the cash basis of accounting).
2)Delivery of goods or services has occurred – you can’t recognize the revenues until you’ve delivered – even if you’ve been paid for the service in advance! Cash Basis of Accounting Revenues are reported on the income statement in the period in which the cash is received from customers.

I hope this really screooo...I mean makes it a little clearer. (lol) Basically accounting and the corporation can fit things into time slots that do the most for the company (the exec's).