Course: Financial Statement Analysis
Lecturer: Dr Wen-hsin Hsu
Questions of Cases
Case 1: Accounting for the iPhone at Apple
Presentation date: Oct 22
(Authors: Brochet, Francois;Palepu, Krishna G.;Barley, Lauren) 1. In your opinion, are GAAP or non-GAAP numbers most reflect the economic reality in Apple?
2. Discuss the impact on financial statements for GAAP and non-GAAP numbers. 3. Should APPLE lobby for their non-GAAP numbers to be sanctioned by FASB? 4. Does it matter if the revenue recognition rule for smartphone changes? Case 2: Bausch& Lomb
(Authors: Miller, Gregory S.;Noe, Christopher F.)
Presentation date: Nov 5
What is the impact of the December 1993 shipments of conventional lenses on the Bausch& Lomb 1993 financial statements” Is the impact significant? Does the new distribution and sales strategy make sense from an operational standpoint? Why or why not?
Do you think the product shipments associated with B&L’s new distribution strategy satisfied the FASB criteria for recognizing revenues? Why or why not?
Case 3: Depreciation at Delta and Singapore Airlines Presentation date: Dec 3 1. Calculate the annual depreciation expense that Delta and Singapore would record for each $100 gross value of aircraft.
(a) For Delta, what was its annual depreciation expense (per $100 of gross aircraft value) prior to July 1, 1986; from July 1, 1986 through march 31, 1993; and from April 1, 1993 on ?
(b) For Singapore, what was its annual depreciation expense (per $100 of gross aircraft value) prior to April 1, 1989; and from April 1, 1989 on?
2. Are the differences in the ways that the two airlines account for depreciation expense significant? Why would companies depreciate aircraft using different depreciable lives and salvage values? What reasons could be given to support these differences? Is 3.
different treatment proper?
Assuming the average value of flight equipment that Delta had in 1993, how much of a difference do...
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