Max-Value Stores, Inc.: Financial Reporting of Gift Cards

2012 ◽  
pp. 1-6
Author(s):  
Mahendra Gujarathi
Keyword(s):  
Financial Reporting ◽  
Real World ◽  
Financial Statement ◽  
Professional Judgment ◽  
Revenue Recognition ◽  
Deferred Taxes ◽  
Real World Setting ◽  
Gift Cards ◽  
Gift Card ◽  
Accounting Changes

The Max-Value Stores case provides an opportunity for students to apply the understanding of various financial reporting topics (revenue recognition, liability de-recognition, accounting changes, and deferred taxes) to determine the applicable GAAP for recognizing gift card ‘breakage’, the estimated amount of gift cards that is unlikely to be redeemed. The case requires students to examine several technical and conceptual financial reporting issues in a real-world setting and helps to strengthen students? accounting research capabilities, understand implications of the choice of an accounting policy for performance measurement and financial statement analysis, and develop critical thinking and professional judgment skills.

Max-Value Stores, Inc.: Financial Reporting of Gift Cards

2012 ◽  
Vol 27 (3) ◽  
pp. 783-798 ◽  
Author(s):  
Mahendra R. Gujarathi
Keyword(s):  
Financial Reporting ◽  
Financial Statement ◽  
Professional Judgment ◽  
Revenue Recognition ◽  
Generally Accepted Accounting Principles ◽  
Real World Setting ◽  
Gift Cards ◽  
Deferred Tax ◽  
Gift Card ◽  
Accounting Changes

ABSTRACT Max-Value Stores, Inc., a discount general merchandise operator, has initiated a program to sell its own gift cards and those of other retailers. This case provides an opportunity to apply your understanding of various financial reporting topics (revenue recognition, liability de-recognition, accounting changes, and deferred tax accounting) to determine the applicable GAAP (generally accepted accounting principles) for recognizing gift card “breakage,” the estimated amount of gift cards that is unlikely to be redeemed. You also must evaluate soundness of the proposals that the management of MVS has made during the process of annual audit to recognize estimated gift card breakage and estimated non-redemption of the restricted gift cards issued during the special Thanksgiving promotion. The case provides you an opportunity to examine several technical and conceptual financial reporting issues in a real-world setting, strengthen accounting research capabilities, understand implications of the choice of an accounting policy for performance measurement and financial statement analysis, and develop critical thinking and professional judgment skills.

Super Electronics, Inc.: Financial Reporting of Sales Incentives and Vendor Allowances Using FASB Codification

2012 ◽  
Vol 27 (2) ◽  
pp. 461-474 ◽  
Author(s):  
Mahendra R. Gujarathi
Keyword(s):  
Financial Reporting ◽  
Real World ◽  
Accounting Standards ◽  
Financial Statement ◽  
Professional Judgment ◽  
Generally Accepted Accounting Principles ◽  
Accounting Principles ◽  
Real World Setting ◽  
Sales Incentives

ABSTRACT Super Electronics, Inc., a specialty retailer, has recently initiated several sales incentives and has entered into a long-term purchase arrangement with a major vendor that entitles it to sliding discounts based on its level of purchases. Using FASB Accounting Standards Codification, you are to determine whether the Company's existing policies comply with Generally Accepted Accounting Principles (GAAP). You are also required to evaluate the soundness of the proposals that SE's management has made during the process of annual audit and explore plausible motivations behind them. The case provides an opportunity to examine several technical and conceptual accounting issues in a real-world setting, strengthen accounting research capabilities, understand implications of the choice of an accounting policy for performance measurement and financial statement analysis, and develop advanced critical thinking and professional judgment skills.

The Hole in the Doughnut: Accounting for Acquired Intangibles at Krispy Kreme

2006 ◽  
Vol 21 (3) ◽  
pp. 297-312 ◽  
Author(s):  
Lori Holder-Webb ◽  
Mark Kohlbeck
Keyword(s):  
Executive Compensation ◽  
Initial Public Offering ◽  
Financial Reporting ◽  
Real World ◽  
Intangible Assets ◽  
Purchase Price ◽  
Real World Setting ◽  
Exit Costs ◽  
Accounting Courses ◽  
Public Offering

Krispy Kreme Doughnuts, Inc. used a 2000 initial public offering (IPO) to embark on an active expansion and franchise reacquisition program. This case focuses on this high-visibility franchise reacquisition program and several associated and highly controversial accounting issues, and provides an opportunity to examine numerous technical and conceptual issues in a real-world setting. In the case, you will encounter a variety of financial reporting issues—from identification and valuation of uncommon intangible assets in Part 1, to acquisition accounting, purchase-price allocations, contingent consideration, exit costs, executive compensation, and loan impairments in Part 2. The case is appropriate for use in intermediate and advanced accounting courses.

Staff Accounting Bulletin No. 108 Disclosures: Descriptive Evidence from the Revelation of Accounting Misstatements

2009 ◽  
Vol 23 (1) ◽  
pp. 19-53 ◽  
Author(s):  
Marsha B. Keune ◽  
Karla M. Johnstone
Keyword(s):  
Real Estate ◽  
Descriptive Analysis ◽  
Financial Statements ◽  
Financial Statement ◽  
Revenue Recognition ◽  
Deferred Taxes ◽  
Audit Firms ◽  
Materiality Thresholds

SYNOPSIS: The purpose of this paper is to provide a descriptive analysis of companies’ previously uncorrected financial statement misstatements using disclosures recently mandated by Staff Accounting Bulletin No. 108 (SAB No. 108). We analyze 355 companies that disclose and correct 792 misstatements in their financial statements filed from November 15, 2006, to February 15, 2008. We present descriptive evidence on the size and industry distribution of companies who disclose SAB No. 108 adjustments, showing that larger companies and those in the banking/insurance/real estate industries are most commonly represented in our sample. We also describe the types of audit firms that are associated with these companies. The results show that the concentration of sample companies in the banking/insurance/real estate industries are most often audited by the smallest audit firms in the market, and there is considerable variation in the application of quantitative materiality thresholds for SAB No. 108 disclosures across audit firms. Finally, our descriptive analyses reveal insights about the nature, direction, and magnitude of specific misstatements corrected by SAB No. 108. For example, we show that the most common SAB No. 108 misstatement corrections involve current liabilities, deferred taxes, revenue recognition, and leases. In addition, many companies in our sample used SAB No. 108 to correct misstatements identified in the current year to avoid restating prior period financial statements.

Singapore Airlines: Accounting for Income Taxes

2002 ◽  
Vol 06 (02) ◽  
pp. 241-254
Author(s):  
Winston Kwok ◽  
Yew Kee Ho
Keyword(s):  
Accounting Standards ◽  
Income Taxes ◽  
Financial Statement ◽  
Financial Analyst ◽  
Deferred Taxes ◽  
Accounting Courses ◽  
Accounting Changes ◽  
Accounting For Income Taxes ◽  
The Impact

Singapore Airlines: Accounting for Income Taxes. A proposed standard on accounting for income taxes would affect the bottomline figures of many companies in Singapore, including a major international company, Singapore Airlines Ltd (SIA). Students have to assume the role of a financial analyst who would have to assess the impact of the change. This is a case that introduces some of the more contentious issues relating to deferred taxes and can be used in intermediate or advanced accounting courses, M.B.A. or executive programs, and courses in financial statement analysis. The objectives of the case are threefold. First, it helps students understand better the conceptual issues associated with deferred taxes. Secondly, it requires students to assess the impact of the proposed accounting changes on key financial figures and ratios. Thirdly, it engages the student to discuss the strategic implications of accounting standards on taxes in relation to management's ability to manage their bottomline numbers.

The Development of Reporting Norms without Explicit Guidance: An Example from Accounting for Gift Cards

2014 ◽  
Vol 28 (3) ◽  
pp. 561-578 ◽  
Author(s):  
Karen M. Hennes ◽  
Kristy M. Schenck
Keyword(s):  
Financial Reporting ◽  
High Frequency ◽  
External Auditors ◽  
Disclosure Requirements ◽  
Wide Range ◽  
Gift Cards ◽  
Comment Letters ◽  
Gift Card ◽  
Industry Peers ◽  
Over Time

SYNOPSIS This study examines the evolution of retail firms' financial reporting for unused gift cards (i.e., breakage) as an example of how reporting norms develop in the absence of explicit authoritative guidance. We find that firms exhibit a wide range of accounting and reporting choices but show significant increases in the quantity and detail of disclosure over time. Consistent with our predictions, these changes in disclosure are positively related to initial disclosure levels below the average of industry peers, the receipt of a related SEC comment letter, and specific external auditors (especially those with a high frequency of related comment letters in their client portfolio). Overall, the evolution of reporting norms for gift card breakage demonstrates the role the SEC, peers, and auditors have in quickly shaping U.S. reporting norms in the absence of formal disclosure requirements.

Spectacular Airlines, Inc.: Implications of the Transition to IFRS in the Context of Cross-Border Acquisitions

2013 ◽  
Vol 29 (1) ◽  
pp. 247-269 ◽  
Author(s):  
Mahendra R. Gujarathi ◽  
Ari Yezegel
Keyword(s):  
Financial Reporting ◽  
Customer Loyalty ◽  
Real World ◽  
Thinking Skills ◽  
Critical Thinking Skills ◽  
Loyalty Programs ◽  
Revenue Recognition ◽  
Business Decision ◽  
Cross Border ◽  
Customer Loyalty Programs

ABSTRACT With increasing global convergence of accounting standards, integration of International Financial Reporting Standards (IFRS) materials in accounting curricula is gaining growing attention worldwide. The Spectacular Airlines case provides an opportunity for you to develop critical thinking skills by requiring you to apply basic accounting concepts to account for customer loyalty programs. It then asks you to identify and apply professional accounting literature to address accounting issues faced by the potential acquirer of Spectacular. Specifically, the case addresses the liability and revenue recognition issues for the frequent flyer plans of airlines, a context in which multiple conceptual approaches are possible and diverse accounting practices are followed. The case helps you to (1) improve your understanding of the importance of financial reporting issues in the context of a real-world business decision, such as cross-border mergers and acquisitions (M&A), (2) research U.S. GAAP and IFRS for addressing revenue recognition issues for customer loyalty programs, (3) understand complexities in the application of an accounting standard in a real-world setting, and (4) evaluate the effects of transition from the local GAAP to IFRS on businesses, their financial statements and ratios.

Multisystemic therapy for child abuse is effective in a real-world setting

2010 ◽  
Author(s):  
C. C. Swenson ◽  
C. M. Schaeffer ◽  
S. W. Henggeler ◽  
R. Faldowski ◽  
A. M. Mayhew
Keyword(s):  
Child Abuse ◽  
Real World ◽  
Multisystemic Therapy ◽  
Real World Setting
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