http://www.reuters.com/article/idUSTRE62322R20100304?type=globalMarketsNews
Summary
This article is about Ciena, a telecommunications network equipment maker, whose stock dropped 7% on Thursday, March 4th, because delayed revenue recognition caused the posting of a "wider-than-expected loss". The article quotes the company saying that it is expected because of some technical problems in revenue recognition that made expectations to not be met. The company expects that the stock will go back up soon. Although the company has not make an estimate in the upcoming quarter, they believe that it will be higher because the revenue in the previous quarter will now carry over. The article then talks about the company's decision to buy a unit of Nortel Networks Corps and wraps it up displaying the numbers of the drop in the stock price.
Connection
This article relates to chapter 4 in that it talks about how the delayed recognition of revenue can affect a company. A small delay that made the first quarter less successful quickly made the stock price drop 7%. This shows the important of revenue recognition as many shareholders and potential shareholders are looking at your quarterly results. The delay that caused the lower-than-expected results made the shareholders to react quickly. Even though the revenue will carry on to the next quarter, the average shareholder will miss that fact without sufficient research. This simply shows the important of proper revenue recognition.
Reflection
I think that even though the stock price was affected, there will be no lasting effect by this delay. Because it will simply carry on to the second quarter and make its revenue slightly more bloated than what it is, which makes up for the loss in quarter 1. Then, they will probably see a rise back in their stock. They probably don't even have to wait that long because a mere 7% drop in the stock price can be quickly adjusted and possibly even change by the very next day. However, bigger and further errors in the future in revenue recognition may shake off the faith of some of its shareholders and may be questioned for its reliability.
Friday, March 5, 2010
Costs For Events in 2010
http://www.vancouversun.com/news/Costs+securing+summits+extra+million/2638426/story.html
Summary
This article talks about the costs for events in 2010 for the Canadian Federal Govenment which are considered extraordinary expenses. The article is mainly about the extra costs that the security for the G8 and the newly expanded G20 summits would bring. It further points out the costs that are needed for the Vancouver Winter Olympics, Haiti Relief Fund, H1N1 mitigration and response activies, as well as other extraordinary events. The Federal government is racking up 179.4 million dollars in costs for security at the G8 and G20 summits which are held in Huntsville and Toronto, respectively. The original G8 summit was expanded because the organization had become the "...dominant forum in dealing with the economic crisis..." It is to be the largest security event ever held in Canada.
Connection
This article relates to chapter 3 in that it talks about some extraordinary events and their costs. There are 3 requirements for an item to be considered extraordinary. Firstly, it must be unusual- and in this case, these events do not take place monthly, or even yearly. Only the olympics has a set cycle but it is rare that it will be on your soil. Secondly, it must be infrequent- a G8 or G20 summit does not happen very often, as well as the olympics, or a pandemic. Lastly, it must not primarily be caused by a decision by someone within the company- which Canada does not have the power to do.
Reflections
As soon as Vancouver won the 2010 Olympics, the protesters were at work, complaining about how the money could be spent on better things instead of causing more debt, not to mention kicking away all the homeless people. But events like this one can bring Canada a better and faster growing future. A company, or a government, must be ready to pay for these extraordinary events because there will always be surprises and unexpected things. Security in such important events must be tight and well funded to ensure that it will not embarrass our entire nation, such as allowing a random mentally challenged man to go within 10 steps to the Vice President of the US.
Summary
This article talks about the costs for events in 2010 for the Canadian Federal Govenment which are considered extraordinary expenses. The article is mainly about the extra costs that the security for the G8 and the newly expanded G20 summits would bring. It further points out the costs that are needed for the Vancouver Winter Olympics, Haiti Relief Fund, H1N1 mitigration and response activies, as well as other extraordinary events. The Federal government is racking up 179.4 million dollars in costs for security at the G8 and G20 summits which are held in Huntsville and Toronto, respectively. The original G8 summit was expanded because the organization had become the "...dominant forum in dealing with the economic crisis..." It is to be the largest security event ever held in Canada.
Connection
This article relates to chapter 3 in that it talks about some extraordinary events and their costs. There are 3 requirements for an item to be considered extraordinary. Firstly, it must be unusual- and in this case, these events do not take place monthly, or even yearly. Only the olympics has a set cycle but it is rare that it will be on your soil. Secondly, it must be infrequent- a G8 or G20 summit does not happen very often, as well as the olympics, or a pandemic. Lastly, it must not primarily be caused by a decision by someone within the company- which Canada does not have the power to do.
Reflections
As soon as Vancouver won the 2010 Olympics, the protesters were at work, complaining about how the money could be spent on better things instead of causing more debt, not to mention kicking away all the homeless people. But events like this one can bring Canada a better and faster growing future. A company, or a government, must be ready to pay for these extraordinary events because there will always be surprises and unexpected things. Security in such important events must be tight and well funded to ensure that it will not embarrass our entire nation, such as allowing a random mentally challenged man to go within 10 steps to the Vice President of the US.
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