Compare and contrast inventory costing, methods of depreciation, and revenue recognition policies for Apple, Dell, and Gateway. Identify which of those three (3) accounting policies would be more important than the other two in influencing your loan recommendation.

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Inventory Costing:
Apple, Dell, and Gateway all use the First in First Out (FIFO) inventory costing method to value their inventory. FIFO assumes that the first items purchased are the first items sold. Apple and Dell also allow for Last-in-First Out (LIFO) as an alternate option. Gateway does not offer LIFO as a choice.

Methods of Depreciation:
Apple uses straight line depreciation for most of its assets with some exceptions for certain tangible assets such as leasehold improvements and computer software which use accelerated methods of depreciation instead. Dell applies both straight line and declining balance methods to depreciate its fixed assets while Gateway only utilizes the straight line method.

Revenue Recognition Policies:
Apple considers revenue to be recognized when goods have been delivered or services have been rendered provided that they are able to estimate fair value of those goods or services, any fees associated with them have been collected in advance and there is no significant uncertainty regarding customer acceptance or collection risk of payment received. Dell follows similar criteria but adds additional steps when it comes to recognizing revenue from multiple element arrangements including subscription based products like cloud services or software licenses by assessing whether vendor specific objective evidence exists documenting each element in an arrangement has been delivered at the time revenue is recognized plus other conditions such as fair value determination exist before revenue recognition can occur. Lastly, Gateway recognizes revenue upon delivery providing that all other accounting criteria have been met such as collecting cash up front if necessary among others mentioned above for Apple and Dell.

The most important accounting policy influencing your loan recommendation would likely be the Revenue Recognition Policy since this will provide you with insight into how much money each company actually makes from selling products/services compared to what’s being reported on paper through their financial statements due to different interpretations around how/when should income be recognized over time by each company which could potentially overestimate or underestimate actual profits depending on what direction one takes in this regard