What Does This Change Mean For 7 Twenty Stores? Essay

Future income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. Deferred financing costs, included in other assets, are amortized on a straight-line basis over the term of the bank financing. Reitmans accounts for stock-based compensation and other stock-based payments use the fair value based method. Basic earnings per share is determined with the weighted average number of non-voting and common shares outstanding during the period. When calculating diluted earnings per share, the weighted average shares outstanding are increased to include additional shares from the expected exercise of options. The number of additional shares is calculated by assuming that the proceeds from such exercises are used to repurchase non-voting and common shares at the average market price during the reporting period. Deferred licensing revenue is amortized on a straight-line basis. The financial statements and accompanying notes have been prepared on a consolidated basis and reflect the consolidated financial position of Reitmans and its wholly-owned subsidiaries. Merchandise inventories are valued at the lower of cost, determined principally on an average basis using the retail inventory method and net realizable value. Income is recorded on the accrual basis. Capital

Since, such an agreement will be regarded as an Operating Lease and not a Capital Lease; this lease will not be reported on the company’s balance sheet. Keeping the lease off the balance sheet would make our financial ratios appear more attractive (lower debt/asset ratio) than otherwise. Hence, such a setup provides the advantage of financing the deal as an off-Balance Sheet item.

Each company’s sizable lease obligations constitutes “off-balance sheet financing,” which directly impacts and reduces future cash flows. While the net present value of Home Depot’s and Lowe’s capital lease obligations are comparable, at $468 million and $435 million respectively, the payment period for Lowes is more immediate, with payments distributed evenly over 6 years compared

National Stores started in 1962 by Joseph Fallas in a single downtown Los Angeles store as Fallas Paredes. The current CEO of National Stores is Joseph, son, Michael Fallas, who began to work as a stocker boy at the age five. The National Stores Inc., is a family-owned company headquartered in the Harbor Gateway of Los Angeles, California, they have more than 350 locations in twenty-two locations in Puerto Rico. The National Stores Inc. does business as Fallas Paredes Discount Stores, Factory 2-U, Conway, CW Price and Anna 's Linen 's by Fallas. Not only does this company have a wide selection of home goods and décor, but it also offers brand name and private label clothing for men, ladies, boys, girls, juniors, infants and toddlers along with lingerie, shoes and household items.

The initial intent of this analysis was to identify changes in accounting methods within the financial statements of Walgreens and CVS, as well as to compare and contrast their financial statements, in order to draw conclusions about which company had better earnings. However, in the process of this analysis, with the exception of a minor change to lease accounting by Walgreens, there were no major changes in accounting methods identified. In examining the financial statements for these two drugstore industry leaders, the analysis shows that while each company conducts retail drugstore operations in similar ways, their business models for carrying out these operations greatly vary. These variances in business model

After adjusting lease expense, it is important to reformulate Income Statement and Balance Sheet to reflect the effect of the adjustments to MYX’s financial statements. To transfer operating lease to financial lease, the remove of lease expense will rise NOPBT by dropping the operating expense. As the nature of asset will be consumed during its economic life, amortisation on lease asset will incur which will plus its operating expense and discount NOPBT.

Evaluating the various accounting alternatives that retailers are confronted with when they receive lease incentives from a lessor.

David Jones does not included leases as part of their intangible assets but Myer does. This shows the different ways of recording accounting record between its competitors, and managers have an incentive to determine on the choice of recording items. This reflects business operation reflecting in its underlying business reality. Therefore, manager has higher chance to manipulate the accounting

According to Boeing’s most recent 10-K, the company states property, plant and equipment (PP&E) at $8,931 million which excludes all operating leases (Exhibit 1).  However, after making our adjustments we found an increase to PP&E of $1,509 million or 16.90 percent with the addition of operating leases stated in company’s footnotes of their 2010 annual report.  Boeing’s long-term debt also increased by 13.15 percent which demonstrates to investors that the company is significantly more risky after the conversion of operating leases.  These adjustments would also increase the company’s expenses in earlier years for any plant or equipment leased as capital leases are depreciated over time, therefore creating a decrease in net income in earlier years.

Due to the new proposal, it will eliminate the company to perform variety of assessment of market and allow them to just use net realizable value as the primary driver of comparing the value of cost. In addition, companies will greatly benefit from this simplification from cost reduction and lower complexity in measuring the inventory. However, there is one issue that the Board still needs to address regarding the update. The Board needs to reconsider the effect of this new guidance in respect to different industries. An example would be the retail industry. The retail industry would be affected by this new guidance by creating more complexities when accounting the inventories. These complexities arise due to the change of the accounting method and when retailer using LIFO method in a declining price inventories. Retailers like Wal-Mart and Target are concerned when they are using LIFO retail inventory method, RIM, because they would record LIFO debit reserves into income. This would affect the company’s earnings to decline and it would not have a good representation in their inventory, which then would affect the accuracy of financial statement and mislead to its users. In my opinion, this is a great proposal of the Simplification Measure of Inventory. Although this would reduce the complexity and cost when measuring inventory, I still think they need to address the

In today’s world, customers often face a dilemma about whether to buy or lease. Lease is an agreement in which one party gains a long term rental agreement, and the other party receives a form of secured long term debt. On the other hand, buying involves transfer of ownership from seller to buyer. Buying or leasing decision depends mostly on customer’s preference. There are many factors to consider before taking a buying or leasing decision.

Most of the executives of Store24, a New England based convenience store, were gathered for an important meeting to discuss a way to increase store level employees retention. Some of the suggestions were to increase wages and bonuses, training enhancements or career development programs. However, top management lacked sufficient information available that would explained the relationship between manager and crew tenure on store level financial performance. Hence, the purpose of this paper is to shed light on the “employee tenure-store level performance” relationship as well as to discover how managerial skill,

v. As of December 31, 2003 the amount of the Capital Lease liability that is current equals $8.47 (the amount by which the principal will be reduced). This estimate differs from “current maturities of capital leases” because current maturities ($25) represent leases that will be retired during 2004. The payment of $44 is to the portfolio of all leases and therefore reflects the interest and principal portions in terms of all of the leases. The amount that actually went to interest and principal cannot be determined without accounting for each lease individually.

After several meetings, the Boards decided to implement the performance obligation approach to lessor accounting where a lessor would identify an asset representing its right to receive rental payments and distinguish a liability representing its performance obligation under the lease (Elena et.al., 2009). Revenue will not be

According to Steve Collings (2010), the accounting treatment of leases has presented a lot of problems over the years for the particular profession. Problems are observed in the way some leases are being treated in a business’ income statement and statement of financial position. Although, as we are going to expand more on that, the major problem of accounting for leases according to Collings (2010), is the manipulation of financial statements by incorrectly categorizing ‘finance leases’ as ‘operating leases’. The main purpose of the essay is to discuss why accounting for leases has been so controversial and whether the new standard (IFRS16) will give a more meaningful picture of companies’ financial position for lessees.