Apple Inc: Analysis of Financial Statement
An Analysis of the Financial Statements of Apple
Intermediate Accounting III
INTRODUCTION
I chose Apple for my course project mainly based on the fact that they release all their records to the public and they have excellent accounting practices. Their paper work is easy to read and follow and based on their records they have an endless amount of revenue in the billions. As we have discussed about Apple in class I was very intrigued how they looked in the books on a specific level of detail and this course project was the perfect way to take initiative to find out just how their numbers actually add up answering the following questions.
1. What amount of deferred tax assets or deferred tax liabilities are on the two most recent years on the balance sheet? What gives rise to these deferred taxes? What information is disclosed in the footnotes related to deferred taxes? Please define a deferred tax asset and deferred tax liability.
At year end September 24 2011 the balance sheet shows following amount of deferred tax assets and liabilities:
Current assets: $(000)
Deferred tax assets 2,014
Current liabilities:
Deferred revenue 4,091
Non-current liabilities:
Deferred revenue 1,686
Deferred tax asset is arising due to deductible temporary differences, tax losses, and tax credits of $3.2Billion and deferred tax liabilities of $9.2Billion. Deferred revenue is recorded when the company receives payments of their products in advance or for the performance of services. It includes amount for unspecified and specified software upgrade rights and non-software services that are attached to the products of the company.
It is disclosed in the footnotes that Deferred tax assets and liabilities shows the effects of tax losses, credits, and the future income tax effects of temporary differences between the consolidated
Intermediate Accounting III
INTRODUCTION
I chose Apple for my course project mainly based on the fact that they release all their records to the public and they have excellent accounting practices. Their paper work is easy to read and follow and based on their records they have an endless amount of revenue in the billions. As we have discussed about Apple in class I was very intrigued how they looked in the books on a specific level of detail and this course project was the perfect way to take initiative to find out just how their numbers actually add up answering the following questions.
1. What amount of deferred tax assets or deferred tax liabilities are on the two most recent years on the balance sheet? What gives rise to these deferred taxes? What information is disclosed in the footnotes related to deferred taxes? Please define a deferred tax asset and deferred tax liability.
At year end September 24 2011 the balance sheet shows following amount of deferred tax assets and liabilities:
Current assets: $(000)
Deferred tax assets 2,014
Current liabilities:
Deferred revenue 4,091
Non-current liabilities:
Deferred revenue 1,686
Deferred tax asset is arising due to deductible temporary differences, tax losses, and tax credits of $3.2Billion and deferred tax liabilities of $9.2Billion. Deferred revenue is recorded when the company receives payments of their products in advance or for the performance of services. It includes amount for unspecified and specified software upgrade rights and non-software services that are attached to the products of the company.
It is disclosed in the footnotes that Deferred tax assets and liabilities shows the effects of tax losses, credits, and the future income tax effects of temporary differences between the consolidated
Cited: http://investor.apple.com/secfiling.cfm?filingID=1193125-11-282113&CIK=320193 http://investing.money.msn.com/investments/stock-balance-sheet?symbol=AAPL& http://finapps.forbes.com/finapps/jsp/finance/compinfo/IncomeStatement.jsp?tkr=aapl&period=qtr http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=aapl