Revenue Recognition and Sales Return Issues at Medicis Corporation

Abstract

Sales returns are often considered a simple financial accounting topic, but in this case accounting for sales returns led to a significant lawsuit and settlement by Medicis Corporation and the largest fine ever imposed against a CPA firm by the PCAOB at the time. This case is designed to aid instructors in teaching accounting for sales with right of return under ASC 606 and is suited for an intermediate financial accounting course or a graduate course in accounting research. {Truncated for Space}