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assignment 1Word文档下载推荐.docx

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ReportedEPS

$0.47

DeferredMaintenance

0.02

HeavyMaintenance

SpringsRelocations

0.03

OtherOverseasDividends

0.10

RestructuringReversal

AdjustedEPS

（earningsmanagement）

$0.63

Table-2

Accountingissues

EffectsonpreliminaryEPS

Proposedsolutionsunderearningsmanagement

DeferredMaintenance

+$0.02

Capitalizeanddeferthecosttosubsequentperiod

Capitalizeanddeferthecosttosubsequentperiodifthemaintenanceserviceimprovethequalityofservice

SpringsRelocation

+$0.03

BrazilianDividends

−−−

Recordedasotherincome

+$0.10

Recordedasotherincomeiftheycanbereasonableestimated

ItalianSubsidiaryWrite-Down

Recordedascostofgoodssoldiftheamountsareinsignificant;

recordedatoperatingcostsiftheamountsareinsignificant

ItalianSubsidiarLawsuit

Disclosedinthefootnotes

MajorAdsCampaign

Expensedthecostinthecurrentperiod

ForeignExchangeGain

Recordedasothercomprehensiveincome

Recordthereversalasliabilityaccount,chargetherestructuringcostsagainstthereversalandaddtheremainingreversalaccountintonetincome

Table-2

ddiscretiontouseaccrualschooseamongdifferentaccountingmethodstorecognizerevenues,recorddepreciationexepense,defertaxpayments,

firmshavediscretioninchoosingaccountingprinciplesandmustmakeestimatedinapplyingthoseaccountingprinciplesinmostcases.Firmsshoulddisclosesufficientinformationinthefinancialstatementsandnotestoinformusersofthesechoices.Measuringtheeconomiceffectsofafirmactivityoftenrequiresjudgement,estimationandsubjectivity.Theincreaseinthedegreeofsubjectivityalsoincreasesthepotentialforfirmstoreportaccountinginformationthatincludeunintentionalmeasurementerrororintentionalbiastoportraythefirminalightmostfavorabletothefirmoritsmanager.

thereasonwhyislargelyaffectedbydivisionmanagers’personalintergrity.tryingtocreateafavorablepictureoftheirdepartment’sgrowthandmaximizetheirowncompensation,themanagersareinducedtoaggressivelyabuseaccountingrulessandencouragequestionableearningmanagementpractices.

Tocreateoptimalmanagercompensationpayments,manipulatetheircompensation

Toinfluenceshorttermstockpriceperformancetomeetthesecurityanalyst‘sprofitforecastwhichwillenhancethesuccessintheacquisitionnegotiations.

.1.Restructuringreserve

Firmrecordarestructuringliabilityonthebalancesheetandtheassociatedrestructuringasanexpenseontheincomestatementwhenfirmshavecommittedtotherestructuringplanandtherestructuringcostsmeetthedefinitionofliability.Earningsmanagementpermitsfirmstoremainthereserveintheaccountsandabsorblossesastheyoccur.Stamfordchargesactuallossesagainstthereserveaccount,insteadofagainstnetincome.Whenthecontingencyissolved,theremainingamountinthereserveaccountwillbereservedandaddedintonetincome.

2.Foreignexchangegain

Shouldbeincludedasowners’equityaspartofothercomprehensiveincomeandincludedasearningsonlywhenfirmsreceivecashfromforeignunitsandcovertforeigncurrencyintoUSdollars.however,earningmanagementcreateopportunitiesforfirmstorealizegainsandreportedasincomebysellingthesecuritiesatagain

3.Deferredmaintenance

Maintainanceandrepaircostsshouldbeexpensedimmediatelyasincurred.Earningmanagementprovidestheopportunityformanagerstoclassifymaintenancecostsascapitalexpenditures,therefore

4.Heavymaintenance

Classifyascapitalexpendituresanddeferextracoststolaterperiod.

5.majoradvertisingcampaign

GAAPrequiresimmediateexpensingofthesecostsasincurredinthefirstquarter.ReportedaspartofSG&

Aexpenseontheincomestatement

6.Braziliandividends

Dividendincomeisreportedasearningsontheincomestatementwhenreceivedordeemtobereceivable.

7.otheroverseasdividends

Reportedasearningsontheincomestatement

8.Italiansubsidiarywrite-down

Reducetheassetaccountofinventory,reportthewritedownofinventoryasanexpenseaccountorcostofgoodssoldaccountintheincomestatement.

Managementjudgmentinthesubsequentexpendituresareacreatesamplyopportunitiesforearningsmanagement.Thecapitalizingvstheexpensechoicehasimmediateeffectsontheincomestatement.Onewaytoincreaseearningsistoclassifyroutinemaintenanceandrepaircostsascapitalexpenditures.thus,investorsmustrelyonmanagement’sintegrityandauditor’smonitoringasprotectionagainstself–interestedmanager’smanipulationsearningsthroughbiasedapplicationofthejudgmentnecessaryinmanysettings.stronggovernanceandauditorreportingofinternalreportingweaknessassisttheaccountingquality.

Aportionofanestimatedannualexpenditurethatmightbeexpensedfortheentireannualperiodmaybeaccruedordeferredattheendoftheinterimperiodasmanagementallocatestheestimatedannualexpensebetweenperiodsonthebasisthatreflectstime,salesvolumn,orproductionactivity.

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Really?

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Itmighthelptostartbythinkingaboutwhatinparticularyouaremissing.

Ifoundamicerestaurantthathasurhometown’slocalspecialty.Woulduliketogosometime?

It’sonlyfiveminute’swalkawayfromschool.

I’vebeenmissingthesmellsofhomecookingeversinceIcamehere.IwaseventhinkingifIshouldaskmymomtosendmeapackageofhomemadewaffles.

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Theshinynewnessofcolleagehasdisappearbynow.InolongenjoymyprivacybecauseIhaveroommate.Ihatetheideaofha