alza corporation
CASE PREPARATION CHART
Student Name
Student ID
Submission date
Case title
Alza corporation: A case study concerning R&D accounting practices in the pharmaceutical industry
Section
ASSESSMENT
To be filled by facilitator
Components
Scores
Scores
1 mark
2 marks
3 marks
4 marks
Completeness of case chart
Case chart is incomplete
Some of the case chart requirements are met satisfactorily.
Most of the case chart requirements are met satisfactorily.
All case chart requirements is met satisfactorily.
Submission
On-time submission
N/A
N/A
N/A
TOTAL
Case analysis
STAGE 1
Issues
Explain the main issues underlying the case. Place extra attention on the what, why and when.
The main issue in this case is the manipulation of account by ALZA Pharmaceuticals Corporation through the arrangement of TDC and Crescendo. In this case, TDC and Crescendo would have been classified as Variable Interest Entities of ALZA Pharmaceuticals Corporation under certain condition. Alza Pharmaceutical Corporation use the off-balance sheet financing techniques to funds its R&D activities. However, ALZA Pharmaceuticals Corporation’s financial statement failed to reflect economic reality through overstating revenues and net income. First, ALZA did not include the assets, liabilities, equity, revenue or expense account of TDC and Crescendo to consolidated financial statement. Second, there were some timing issues regarding ALZA's recording of product development revenue and Crescendo's recording of R&D expense.
Key players
Based on the issues identified above, determine the key players involved, their position/roles and the main decision that they have to make.
Num.
Who?
Position/roles
Main decision
1
ALZA Pharmaceuticals Corporation
Parent company of TDC and Crescendo
1) To include or exclude the assets, liabilities, equity, revenue or expense account of TDC and Crescendo to consolidated
Student Name
Student ID
Submission date
Case title
Alza corporation: A case study concerning R&D accounting practices in the pharmaceutical industry
Section
ASSESSMENT
To be filled by facilitator
Components
Scores
Scores
1 mark
2 marks
3 marks
4 marks
Completeness of case chart
Case chart is incomplete
Some of the case chart requirements are met satisfactorily.
Most of the case chart requirements are met satisfactorily.
All case chart requirements is met satisfactorily.
Submission
On-time submission
N/A
N/A
N/A
TOTAL
Case analysis
STAGE 1
Issues
Explain the main issues underlying the case. Place extra attention on the what, why and when.
The main issue in this case is the manipulation of account by ALZA Pharmaceuticals Corporation through the arrangement of TDC and Crescendo. In this case, TDC and Crescendo would have been classified as Variable Interest Entities of ALZA Pharmaceuticals Corporation under certain condition. Alza Pharmaceutical Corporation use the off-balance sheet financing techniques to funds its R&D activities. However, ALZA Pharmaceuticals Corporation’s financial statement failed to reflect economic reality through overstating revenues and net income. First, ALZA did not include the assets, liabilities, equity, revenue or expense account of TDC and Crescendo to consolidated financial statement. Second, there were some timing issues regarding ALZA's recording of product development revenue and Crescendo's recording of R&D expense.
Key players
Based on the issues identified above, determine the key players involved, their position/roles and the main decision that they have to make.
Num.
Who?
Position/roles
Main decision
1
ALZA Pharmaceuticals Corporation
Parent company of TDC and Crescendo
1) To include or exclude the assets, liabilities, equity, revenue or expense account of TDC and Crescendo to consolidated