How can a write-down on oil reserves be beneficial to Exxon’s executives (i.e., “bail them out”)? How would you determine if a probe into accounting practice were “politically motivated”?
Facebook had an accounting change that resulted in a $900 million boost to earnings. The FASB now requires “excess tax benefits” from stock options to flow through the income statement, rather than APIC. Does the change improve financial reporting? How?
What is the purpose of “clawing back” pay to executives and other employees? Do you find the idea substantive? Symbolic? How would you determine how much to claw back? What behaviors should trigger a claw back, if any?
How is a “bad” M&A deal reflected in accounting measures? Do you think firms do pay more for a target in anticipation of being able to carry out the integration efficiently and effectively?
If you were on the board of directors, how would you try to quantify synergy as part of your due diligence responsibility in M&A? Is it necessary to do so?
Why do you think Electronic Arts decided to discontinue reporting non-GAAP measures? Who benefits from this? Who loses? Do you think their decision is a good one?
What would you do, as a CFO, to try to offset the increase in the underfunded status of your DB pension plan caused by declining interest rates?
Fitbit’s 8-K (click on Ex. 99). Try to follow the numbers mentioned in the above article. What’s driving the reduced profitability?
Apparently a large portion of BP’s settlement for the Gulf Oil spill is tax deductible. In your opinion, should it be tax deductible? Why or why not? Assuming the deduction will be taken in the future, what is the entry to recognize tax expense and the deferred tax asset? What is the effect on the effective tax rate on the nondeductible portion?
Why should governments adopt accrual accounting, instead of continuing to use cash accounting? Should governments be forced to adopt accrual accounting? How could that be done?
What are the benefits of zero based budgeting? Costs? When might the costs outweigh the benefits? Should governments use zero-based? Why or why not? If they should, why don’t they?
Ford and GM estimate that they will have to spend $300 million each to implement the new revenue recognition standard. Other companies will also likely spend nontrivial amounts complying with the new standard. How would you propose measuring the benefits of this standard and whether the benefits exceed the costs?
Do you think it should be up to the registrants to decide what information is relevant for investors? Who else should decide what disclosures are relevant?
What do cuts in dividends suggest about a firm’s future? Why do you think AT&T may be considering selling “non core” assets? In your opinion, is this a good idea? What are the potential legal consequences for firms who divulge potential market-moving information at nonpublic “dinner meetings”?
In a critical reading of this announcement, why do you really think the IASB offered the FASB a seat at the table on its new 12 member forum?
Is there any convincing reason to have a budget? Why do you suppose educators continue to teach budgets and “variance analysis”?
Does the IFRS approach in measuring impairment put BP at a “disadvantage” relative to Exxon? If so, how? Would BP be able to reverse the impairment? If Exxon had an impairment, would it be able to reverse it? Exactly what is the “time value” component of the analysis these days?
In your opinion, who will ultimately be proved right in the current debate: French President Hollande or the CEO of Peugeot? How would you decide among a dividend, share repurchase, or keeping workers on the line? What are the multiple factors to consider?
Why do you suppose that firms in Spain and Italy have significantly “worse” working capital management compared to firms in Germany and Scandinavia? Or, do you think that the working capital practices are not necessarily “worse,” but rather just “different”? Do the differences matter? How?
These 10 brands predicted to disappear in 2013 should have leading indicators of this happening in their financial statements. What would be examples of these indicators?
