... flows Hotye should implement the accelerated method of depreciation. In order to avoid a conservative revenue recognition policy, it has been recommended that revenue be recorded as the service is provided to the customer. Other material issues that are discussed include those of leasehold improvements, non-arms length transactions, how to account for labour costs and cost of consumables, and current and future added accessories. For all of the issues relating to capitalization versus expensing, it has been determined that capitalization is the alternative that most aptly satisfies the primary objective of the case. Appendix A coalesces the recommendations of each of the issues faced by the company into pro-forma income statements. These statements show the potential for future earnings growth and attempt to maximize after-tax cash flows. The choices and recommendations made in this report aim to achieve the outlined objectives of users, while ensuring that the company get approval ...

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