Analysis of Microsoft's Accounting Policy

The first milestone will be concept approval. During this phase, feasibility studies and basic system concepts have been approved by the management. The project is on course to proceed according to the detailed requirements. The next milestone is requirements review. During this stage, requirement specifications are ready, correct, and approved for input to the design. The next milestone will be preliminary design review here the architectural design meets all product requirements. Critical design review will then follow. During this phase, the detailed designs are approved and suitable for the development of test cases. The next milestone will be the test plan review, which involves reviewing the test plan to ensure product features are satisfactory. The next milestones will be tested readiness review, system test review, operational readiness review, and operational product

Microsoft was founded in 1975 by Bill Gates and Paul Allen from Seattle, and incorporated in 1981 (Liquori, 2011). Being the number one software company in the world Microsoft employs about 52,000 people working full-time, 21,000 in product research and development, 23,500 in sales, marketing, and support, 2,200 in manufacturing and distribution, and 4,000 in finance and administration. The following report will include an analysis of financial reports, income statements, Balance sheets, and cash flow statements (Liquori, 2011).

The Microsoft Corporation has been a giant in the software industry for over three decades. The company’s founders, Bill Gates and Paul Allen, put together an operating system for the computer world that ultimately captured the attention of every one on earth. However, it was Bill’s pure genius and leadership qualities that took software to a level that was unmatched by anyone. Paul was the mastermind behind the hardware that needed Bill’s software to operate effectively.

When we study the tangible resources of Microsoft, we discover that it has a very large cash reserve (approximately $66 billion) and a low leverage ratio of 0,79 in 2014. These matters indicate the company has the reserve to invest and that they can finance growth by debts (if necessary). It is important to underline this point as it impacts directly the key strategic points Nadella has stated. Capability wise, Microsoft is very effective when it comes to continuous improvements, engineering and technical know-how, and research capability.

Briefly speculate as to why Microsoft chose to expense all software costs as incurred rather than capitalizing a portion of these

It is the goal to maximize the wealth of shareholders and Microsoft was able to use their excess cash to repurchase stock that led to a large return. The repurchase of stock has taken place over the last few years and has helped to increase the shareholders return. Another impact of costs would be operating expenses. The cost of revenue has been rising over the last few years. (Microsoft Corporation, 2009)

Capital budgeting decisions involve investments requiring large cash outlays at the beginning of the life of the project and commit the firm to a particular course of action over a relatively long period of time. As such, they are costly and difficult to reverse, both because of: (1) their large cost and (2) the fact that they involve fixed assets, which cannot be liquidated easily.

Total Cost of Ownership (TCO) is framework for understand the hidden costs and benefits of technology that may not necessary be apparent in the initial expense procuring certain technical solutions (Hockel & Hamilton, 2011). An example may be upgrade costs associated with acquiring a new computer. The initial pricing for the computer may be apparent, but the future costs that will be incurred to improve the unit or make more robust and proficient must also be considered.

The Financial Accounting Standards Board (FASB) writes the code that directs certified public accountants and accounting professionals in non-governmental environments. On occasions, the FASB proposes changes to those accounting standards. This process includes exposure drafts. The issuance of exposure drafts is for individual and business comments. The input from the respondents in comment letters is analyzed and considered by the board in the deliberations regarding the issue. "Proposed Accounting Standards Update – Presentation of Financial Statements (Topic 205): Reporting Discontinued Operations," published on April 2, 2013, discusses changing the reports to be more useful and reduce costs for preparers. This report will discuss the exposure draft in depth and the comment letters accordingly.

Microsoft was founded in 1975, and is the worldwide leader in software, services, and solutions (Career). Microsoft is proud to offer great products and employ outstanding people. Previous Microsoft CEO, Steve Ballmer once said, “There are many things that are true about Microsoft. We have big goals, big dreams, and big aspirations for the future. We are both competitive with our products and in the way we attract and retain talent. For me, the most important factor is competition for talent, because I know our success comes from the people who work here” (Foley).

Microsoft, a key figure in the technology industry, presents many key products and services that help the technology industry grow to where it has gotten. Microsoft is a corporation that is the NASDAQ market. The company provides products and services in the technology industry. The products highlighted for the 2015 fiscal year for Microsoft were the Surface family, Microsoft Office 365, and Xbox console to name a few. Microsoft has a retail sector that have both online and in store locations, with addition to business to business commerce. In the SEC 10-K analysis for the fiscal year ending on June 30, 2015, Microsoft includes key financial features to include nonmanufacturing (selling and administrative expenses) to go along with the

Microsoft Corporation was founded by William H. Gates III also known as Bill Gates and Paul G. Allen in 1975. Since their inception they have been credited for developing various operating systems to coordinate with the personal computer (PC). “Microsoft possesses a dominant, persistent, and increasing share of the world- wide market for Intel-compatible PC operating systems. Every year for the last decade, Microsoft 's share of the market for Intel-compatible PC operating systems has stood above ninety percent. For the last couple of years the figure has been at least ninety-five percent, and analysts project that the share will climb even higher over the next few years (Justice).” Microsoft has also

Attached is an Income Statement from 2005 to 2007 (Microsoft Corporation Annual Report, 2008). As you can see, revenues and net income have continued to increase over the years. Earnings per share have increased as well. This shows that Microsoft is in a good financial standing. This means they are able to pay their shareholders and increase what they

This report is issued in order to inform the public about Microsoft Corporation. We analyzed the profitability and liquidity of this company. In addition, we were able to provide recommendations for investments or credits in Microsoft for the best interest of the public.

Financial statements are frequently a key source of information for financial decisions and taking a look at Microsoft’s financial statements can help us decide certain things about the company. There are three different types of statements that will be discussed in this section. These include: the balance sheet, the income statement, and the statement of cash flows. They are discussed here in either the sense of quarterly or yearly statements and will be noted as so. All information has been derived from Yahoo Finance. (http://finance.yahoo.com)