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.

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.

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.

scholarly journals Impact of Changes in Accounting Standards on Earnings Management

2020 ◽  
Vol 2 (2) ◽  
pp. 166-175
Author(s):  
Kawa W. Muhamad ◽  
Subhi M. Saleh ◽  
Kees van Paridon
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Quality Standards ◽  
Financial Reporting Quality ◽  
High Quality ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Accounting Principles

This study considers the question whether the changes in Accounting Standards has led to companies making less use of earnings management. The paper is an attempt to investigate whether the application of high quality standards like International Financial Reporting Standards (IFRS) is related to high financial reporting quality. This study addresses this issue empirically. Furthermore, this research examines whether German companies that have applied IFRS have less earnings management compared to German companies that report according to the German Generally Accepted Accounting Principles (GGAAP). The sample, consisting of two equally large listed companies in Germany (Südzucker Group and Henkel Group) from 2003-2014. The study suggests that IFRS-adopters show different earnings management performance compared to companies reporting under German GAAP. This finding contributes to the discussion on whether high quality standards are appropriate and operational in countries with weak investor protection rights. The result shows that adopters of IFRS in Germany can be related with less use of earnings management as a result of changes in accounting standards. This result is contradictory with previous research that was done by Van Tendeloo and Vanstraelen, (2005), and consistent with the previous research conducted by Ball et al. (2003).

scholarly journals Continued Impact of International Financial Reporting Standards on U.S. Generally Accepted Accounting Principles

2020 ◽  
pp. 1-12
Author(s):  
Sylwia Gornik-Tomaszewski ◽  
Victoria Shoaf
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Fair Value ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Accounting Principles ◽  
Value Measurement ◽  
The Impact

The milestone outcomes of over a decade of close cooperation between the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) on the convergence of U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) have been highly publicized in the professional media. Great attention has been paid to such joint FASB and IASB projects as accounting for business combinations, fair value measurement, and revenue recognition. The impact of U.S. GAAP on IFRS has also been discussed and highlighted in many professional and academic resources. It should come as no surprise since FASB is considered a world leader in creating high-quality standards through an exemplary standard-setting process. In this paper, we look at the least noticed outcome of the convergence process: the impact of IFRS on U.S. GAAP. We reviewed all of the Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification®, from the first issued in June 2009 to 2016, and listed instances where U.S. GAAP was significantly modified to reflect international solutions. These examples of U.S. GAAP modifications indicate that the impact of IFRS on U.S. GAAP continued well after the bilateral cooperation between FASB and IASB effectively ended in 2014. Furthermore, look at the most recent FASB pronouncement let us conclude that the FASB continues to be engaged in seeking comparable global accounting solutions.

scholarly journals De toekomst van IFRS in Europa: gaat de bom vallen?

2015 ◽  
Vol 89 (4) ◽  
pp. 120-121
Author(s):  
Ralph ter Hoeven
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
International Financial Reporting Standards ◽  
International Accounting ◽  
International Accounting Standards ◽  
Reporting Standards ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Accounting Principles ◽  
Jaar Geleden

Het is inmiddels 20 jaar geleden dat de Europese Unie een beslissende keuze maakte in het ontwikkelen van een eigen GAAP (Generally Accepted Accounting Principles; dus stelsel van accountingregels). De keuze luidde: no, non, nein, não, nej, nee: er zou geen eigen EUGAAP worden ontwikkeld. Wel werd er voorzichtig gewezen op de toenmalige International Accounting Standards (IAS); inmiddels omgedoopt tot International Financial Reporting Standards (IFRS). Kortom Lidstaten werden vrijgelaten in de keuze van een GAAP voor beursgenoteerde ondernemingen en een beetje aangemoedigd om daarbij aan IAS te denken. Vijf jaar later, rond de millenniumwisseling dus, volgde er een update van de Europese accountingstrategie waarin niet geheel verrassend werd geconstateerd dat jaarrekeningen op de EU-kapitaalmarkt niet vergelijkbaar waren.

scholarly journals Analisis Penyajian laporan Keuangan Koperasi Syariah BMT Al-Ittihad Pekanbaru

2019 ◽  
Vol 16 (1) ◽  
pp. 1-22
Author(s):  
Zulkifli Zulkifli ◽  
Boy Syamsul Bakhri ◽  
Rahmawati Rahmawati
Keyword(s):  
Descriptive Analysis ◽  
Accounting Standards ◽  
Financial Statements ◽  
Financial Accounting ◽  
Financial Statement ◽  
Research Subject ◽  
Generally Accepted Accounting Principles ◽  
Descriptive Research ◽  
Accounting Principles

Accounting standards is fundamental in the preparation of financial statements that must be referred to each company. Accounting standards that form these statement codified in a book called financial accounting standards (GAAP). The book contains a collection of statement of financial accounting standards (SFAS). This study aims to determine the extent of the financial statement presetations of BMT Al-Ittihad in applying generally accepted accounting principles in particular SFAS No.101. This research is a comparative descriptive research that describes, explains and compares the financial statements of BMT with SFAS 101. The research subject is a sharia cooperative  BMT Al-Ittihad  Pekanbaru while the object is to report RAT BMT Al-Ittihad Pekanbaru. Data were collected by interview and documentations. The analisis is comparative descriptive analysis, which compares the data that has been collected by the relevant theories to draw a conclusion. Based on the results, itshow that the financial statements of BMT Al-Ittihad has not fully adopted SFAS No.101, because: 1) it does not present a statement of sources and uses of zakah, 2) it does not present a statement of sources and uses of charity fund, 3) it does not present a note to the financial statements, 4) it does not present informations of preparations of financial statements and the accounting polices used, and it does not to disclose information required under SFAS No.101.

scholarly journals iRobot Corporations Intellectual Property: Accounting For Research And Development Under U.S. GAAP Versus IFRS

2013 ◽  
Vol 9 (4) ◽  
pp. 321-332 ◽  
Author(s):  
Robert M. Bowen ◽  
Jane Jollineau ◽  
Loren Margheim
Keyword(s):  
Intellectual Property ◽  
Research And Development ◽  
Financial Reporting ◽  
Real World ◽  
Reporting Standards ◽  
Rule Based ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Accounting Principles

Founded by MIT scientists in 1990, iRobot Corporation designed, developed, and sold consumer and military robots to help people complete dull, dirty or dangerous tasks in real-world situations. The purpose of this case study is to stimulate discussion about intellectual property and how it should be measured and reported. Under U.S. generally accepted accounting principles (GAAP), iRobot reported no asset related to their internally generated intellectual property despite over 20 years of intensive research in robotics. In contrast, international financial reporting standards (IFRS) permitted firms to treat certain research and development (R&D) activities as an asset. By comparing U.S. GAAP and IFRS treatments of R&D, we provide an interesting example of the range of potential financial reporting effects across alternative accounting methods. Further, the case requires that students wrestle with the implications of moving from more rule-based accounting (U.S. GAAP) to more principles-based accounting (IFRS). How might U.S. managers, auditors, and investors likely respond? A teaching note is available.

Inconsistencies in U.S. GAAP: Accounting for Executory Contracts

2006 ◽  
Vol 21 (3) ◽  
pp. 291-295 ◽  
Author(s):  
Timothy B. Forsyth ◽  
Michael T. Dugan
Keyword(s):  
Accounting Standards ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Legal Form ◽  
Generally Accepted Accounting Principles ◽  
Case Research ◽  
Accounting Principles ◽  
Setting Process ◽  
Cpa Exam

This instructional case provides four different scenarios that illustrate the inconsistent treatment of various executory contracts under current generally accepted accounting principles (GAAP). The purpose of the case is threefold. First, it provides students an opportunity to use the Financial Accounting Research System (FARS) to resolve several accounting issues related to long-term executory contracts. Familiarity with FARS is essential, both for “real-world” use when students enter the accounting profession and for success on the computerized CPA exam, which includes case research. Second, as the Financial Accounting Standards Board (FASB) attempts to move toward principles-based standards (as opposed to rules-based standards), the case provides students an opportunity to observe that GAAP seems to be rules-based and theoretically inconsistent in the case of executory contracts. Third, the case can be used as a premise for discussing the standard-setting process and exploring differences between the economic substance of a transaction and its legal form.

An Exploratory Study of the Valuation Properties of Cross-Listed Firms' IAS and U.S. GAAP Earnings and Book Values

2002 ◽  
Vol 77 (1) ◽  
pp. 107-126 ◽  
Author(s):  
Hollis Ashbaugh ◽  
Per Olsson
Keyword(s):  
Exploratory Study ◽  
Accounting Standards ◽  
Equity Market ◽  
Residual Income ◽  
International Accounting Standards ◽  
Generally Accepted Accounting Principles ◽  
Listed Firms ◽  
Valuation Model ◽  
Accounting Principles ◽  
Book Values

Despite the increasing integration of global capital markets, there is little evidence on the valuation properties of cross-listed, non-U.S. firms' accounting variables. We use the relative performance of the earnings capitalization, the book value, and the residual income valuation models to explore the valuation properties of International Accounting Standards and U.S. Generally Accepted Accounting Principles earnings and book values reported by non-U.S., cross-listed firms trading in a common equity market. Using non-U.S./non-U.K. firms whose shares trade on the International Stock Exchange Automated Quotation system in London, we find that the earnings capitalization model is the dominant accounting-based valuation model when crosslisted firms report under International Accounting Standards. In contrast, we find that when cross-listed firms report under U.S. Generally Accepted Accounting Principles, the residual income model is the dominant accountingbased valuation model. Our exploratory study provides insights into the valuation implications of allowing a dual reporting system for foreign registrants trading in a common equity market.

Does Auditor Explanatory Language in Unqualified Audit Reports Indicate Increased Financial Misstatement Risk?

2014 ◽  
Vol 89 (6) ◽  
pp. 2115-2149 ◽  
Author(s):  
Keith Czerney ◽  
Jaime J. Schmidt ◽  
Anne M. Thompson
Keyword(s):  
Financial Reporting ◽  
Reporting Quality ◽  
Positive Association ◽  
Financial Statements ◽  
Financial Statement ◽  
Financial Reporting Quality ◽  
Accounting Principles ◽  
Client Relationship ◽  
Financial Misstatement ◽  
Audit Reports

ABSTRACT According to auditing standards, explanatory language added at the auditor's discretion to unqualified audit reports should not indicate increased financial misstatement risk. However, an auditor is unlikely to add language that would strain the auditor-client relationship absent concerns about the client's financial statements. Using a sample of 30,825 financial statements issued with unqualified audit opinions during 2000–2009, we find that financial statements with audit reports containing explanatory language are significantly more likely to be subsequently restated than financial statements without such language. We find that this positive association is driven by language that references the division of responsibility for performance of the audit, adoption of new accounting principles, and previous restatements. In addition, we find that (1) “emphasis of matter” language that discusses mergers, related-party transactions, and management's use of estimates predicts restatements related to these matters, and that (2) the financial statement accounts noted in the explanatory language typically correspond to the accounts subsequently restated. In sum, our results suggest that present-day audit reports communicate some information about financial reporting quality.

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