Redo of Chapter 2 Blog

http://www.thestar.com/business/article/709304--siemens-gets-ontario-wind-turbine-order

Summary
Siemens AG has been picked to supply 250 wind turbines, worth US$ 888 million, to the United States and Canada. One fourth of the orders are going to unspecified projects in Ontario, while the other turbines will be sent to California, Oklahoma, Washington, and Wyoming. To undergo this project, Siemens in North America needs all 900 workers, and is planning to increase that amount. Wolfgang Dehen, chief executive of Siemens, said that this proves a lot to the wind industry. He believes that the wind industry has a definite standing in the market and having the support from Canada and US is helping out the wind project development.

Connections
There were several connections I made between this article and the book. Revenue Recognition Criteria is the GAAP that will determine when Siemens Ag will recognize expenses and revenue. Revenue will be recognized when Siemens AG has completed the turbines or when there is a high chance that the project will be completed. Selling these 250 wind turbines of assets is considered an operating activity for the company because the wind turbines being produced have value to the company and will be of economic benefit in the future are eventually going to be sold, generating profit (or loss). Selling these assets will cause an increase in the cash flow statement of Siemens AG, resulting in an increase in the retained earnings. Lastly, Siemens AG as of right now has approximately 900 workers. When wages are not paid out yet in cash but it is the end of the period, the wages are going to be recognized in the income statement. That is an example of an accrued expense, where expenses are recognized in the income statement prior to being paid out in cash during that period.

Reflection
The wind project development’s goal is to use natural power, in this case the wind, to generate the electricity we use. I love how US, and Canada, are supporting the wind project development. This sends a message to the rest of the world that the leading producer of carbon dioxide, the US, is moving towards becoming a green country.

However, why has US and Canda turned to Siemens, a German-based company, to do the making of the turbines? Doesn't Canada and US also have the man power to create those machines? That was one thing that stumped me as I was reading the article. Nonetheless, one thing is for sure, and that is Siemens is the leading invester in ecofriendly projects. They will play a major roll in helping Canada and the US to establish a green reputation
Clement Ip