Term Paper

If you work this problem as a group assignment, each group member should be prepared to

8) What would BV's 1988 earnings per share be after all of the above adjustments?

1. Describe the impact the three proposed accounting methods (full revenue recognition, deferral of revenue, and partial revenue recognition) would have on the company’s financial statements: 1) at the time of the sale, and 2) in future periods.

B. Describe what it means for a business to “recognize revenues.” What specific amounts and financial statements are affected by the process of revenue recognition? Describe the revenue recognition criteria outline in the FASB’s statement of Concepts No. 5.

2. What do you think are the motives of Harnischfeger's management in making the changes in its financial reporting policies? Do you think investors will see through these changes?

b. Why do you think Microsoft decided to defer a portion of its revenues in fiscal 1996?

4. The case indicates that the company’s “market value” of equity at June 30, 1999 was $460 billion. Compare this to the company’s “book value” of equity. What factors likely explain the difference between these two values?

3. In this particular case, due to lack of proper revenue recognition in previous periods in this audit, many challenges in using financial information surfaced.

1. Please conduct a financial ratio analysis using the data in Exhibit 2. How do the results reflect different strategies pursued by the 4 firms?

1. From a strategic management standpoint, why do you think that corporate management at Alcoa delayed taking action for five years as the plant continued to lose money and deteriorate in other operational measures?

B) How well has Berkshire Hathaway performed? In the aggregate? In its investment in Scott & Fetzer? In its investments in earlier purchases of GEICO stock? In its investments in convertible preferred securities?

Open-ended questions such as these will generate energy in the class, though the instructor should take care to limit the amount of time spent in this phase of the class, since students will find it easy to offer observations about the firm’s apparent strategy and financial performance. By letting the students assess the problems of this company in a nondirective fashion, the instructor can gauge students’ abilities and build students’ “ownership” of the analysis. The next three questions are a directive approach to problem assessment and could supplement this question or be used in place of it.

This memorandum is intended to communicate the deferred tax issues of Lucent Technologies Inc. on the basis of analysis of the veracity of the situation according to the reporting framework’s guidelines to anticipate unfavorable implications that had been resulted due to poor performance of the company over the past years. The Financial Accounting Standards Board (FASB) is the recognized body for making pronouncements as Generally Accepted Accounting Principles (GAAPs) in the United States. The FASB has promulgated Statement of Financial Accounting Standard # 103 “Accounting for Income Taxes” which specifically prescribes the treatment of income taxes of corporate entities and guidance for how deferred taxes should be

Revenues from circulation in 2011 have marginally increased from 2010. The difference in revenues is $2940M-$2323B = $617M and we are only recovering an estimated $118M. There is variable cost savings associated with the loss of print subscribers but this is probably offset with loss of advertising revenue and development costs for digital solutions.

Q.3 Why Superior Improved Profitability during the period January 1 to June 30, 2005? How useful was the data in Exhibit 4 for the purpose of this analysis?