ipl-logo

Apple Non Gaap Essay

1241 Words5 Pages

1) Articulate the financial statement impact of the alternative accounting proposed by Apple.

International financial reporting standards require companies to use the regular price charged when the item is sold as the best evidence of fair value. An alternative approach, in accordance with IFRS, plus a return on costs. That is, IFRS puts the onus on management to evaluate the component of the product, based on what it costs to produce a piece plus share of profit margin built into the unit. Management usually bases its estimate on historical sales, as well as current sales prices are set on the market. Cost plus margin is not allowed under GAAP.

An alternative method of accounting by Apple is Non-GAAP supplements. It will continue to ensure …show more content…

It allowed investors to truly look into the growing prospect of the company.

2) Under Apple's proposed alternative accounting, the reconciliation between net income and cash flow from operations no longer reflects changes in deferred costs and revenues related to subscription accounting as displayed under the GAAP numbers. Which method best reflects the economic reality?

Non-GAAP methods of Apple's better to reflect economic reality. However, there are still limitations as to the extent to which it does so.

This does not affect the cash flow of the business, this has affected the periodic profit that the company, which was reflecting only a fraction of the actual profit that the company made. As these deferred income increases with an increase in turnover, the actual profit for the period and the difference of profits (one quarter at a time, due to the accounting of subscription) was growing too.

Revenue and cost of sales will increase, because it changes the depreciation for the current period deferred income derived from the iPhone and Apple TV. Since the increase in profit before taxes, the income tax will also

Show More
Related
1089 Words | 5 Pages

In the 2017 Super Bowl, TurboTax released a commercial featuring the familiar tale of Humpty Dumpty. In this clip, Humpty is featured filling out his taxes online while sitting on a wall and suddenly falls. Everyone in the commercial is surprised to find out that when he fell he was filling out his taxes. The message of the TurboTax commercial can be see in their slogan, “anytime, anywhere,” (TurboTax Super Bowl Commercial). In this commercial TurboTax makes it clear that anybody can do their taxes whenever and wherever they would like.

Read More
477 Words | 2 Pages

The Target Corporation, NYSE symbol TGT, had revenues in 2015 of $72,618 million. In order for Target to transition from General Accepted Accounting Principles (GAAP) to the International Financial Reporting Standards they will first have to follow the IFRS 1, which is the First Time Adoption of International Financial Reporting Standards. The IFRS 1 is the structure pertinent to those implementing IFRS for the first time (Gornik-Tomaszewski & Sellhorn, 2010). In order to transition from GAAP to IFRS companies need to undertake three steps. Those steps include 1) Selecting an accounting practice that is in compliance with IFRS, 2) Prepare an initial IFRS statement of fiscal position, using the date of transition to IFRS as starting date, and 3) Present and disclose their first set of IFRS financial reports along with an rationalization of the conversion from GAAP to IFRS (Gornik-Tomaszewski & Sellhorn,2010).

Read More
365 Words | 2 Pages

Edmonds, T. P., Tsay, B., & Olds, P. R. (2011). Fundamental managerial accounting concepts (6th ed.). New York, NY: McGraw-Hill

Read More
680 Words | 3 Pages

According to IAS 7 and ASC 230, companies can use either the direct method or indirect method for the statement of cash flows. Brown-Forman Corporation and Diageo selected to use the indirect method, and the presentation format is similar. One difference between the two company is ASC 230 required Brown-Forman to reconcile net income to cash flows from operating activities regardless of which method it uses (Deloitte). IAS 7 only required reconciliation when using the indirect method, “the indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing

Read More
627 Words | 3 Pages

For example, Verizon has increasing number of common stock. It was $424,000. Also, retained earning increased about 27%. Cash flow Statement Net cash provided by operating activities during 2014 decreased by $8.2 billion because increase in adjustment to net income like increase in income tax payments and interest payments.

Read More
831 Words | 4 Pages

Accounting methods include cash receipts, accrual method, and a hybrid method, a combination of cash and accrual method. It is crucial for companies to recognize when they qualify for each method. This paper analyzes the cash method and the accrual method described in Turin Vs. Commissioner of Internal Revenue, explains how Jim Turin & Sons, Inc. asserted its position, and the key points in

Read More
629 Words | 3 Pages

Some entities will be needed to make more estimates, for instance, for transactions with variable consideration. In addition, the increase in estimates and judgments is accompanied by an increase in disclosures to describe the estimation methods, inputs, and assumptions. It is required that all entities will need to update their accounting policies, procedures, and internal controls to conform to the new revenue recognition model. SCOPE [2]

Read More
1603 Words | 7 Pages

Harvard Business School Press, Boston, MA. Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2016). Accounting: Tools for Business Decision Making, 6th Edition. John Wiley &

Read More
930 Words | 4 Pages

Apple Inc. Memorandum To: Mark Callaway, Apple Manager From: Hamilton Vo, Sales Associate of Apple Date: October 12, 2015 Subject: Tuition Reimbursement Program I have decided to pursue my ambition of obtaining a college education and a degree.

Read More
468 Words | 2 Pages

Non-for-Profit accountants are liable for the financial management of a nonprofit company and organizations have special rules that pertain to the organization's accountants. Accountants of Not-for-Profit work closely with management, board members, and staff, making sure everything is in order financially. Another responsibility these accountants have is, showing monthly account information, which deals with accounts payable and account receivable. Not-for-Profit accountants are to show information that regards to bank accounts and current information on investment accounts and show information pertaining to the expense account. Any donations that are made to a nonprofit organization, Non-for-Profit accountants handle the accounts, in addition to, accountants are also known to take care of any assets and grant information.

Read More
552 Words | 3 Pages

In 2002, the SEC adopted new rules and amendments to address public companies’ disclosure or release of certain financial information that is calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles. The accrual accounting is more popular and be widely used in business world because it produces more accurate and faithful financial statements that constitute better representation of actual circumstances than its main competitors. The major weakness of accrual accounting is that there is some time issue such like the time of occurred and time of recorded would probably be different and it increases the risk of financial information and the risk of correctness. Also, the accrual accounting generally cost more to operate compared with cash accounting

Read More
895 Words | 4 Pages

Wilkerson is currently using the traditional costing system. “Companies that use the traditional costing method assume that the volume metric is the underlying driver of manufacturing overhead cost.” Traditional product costing was established when direct material costs and direct labor costs accounted for the bulk of product costs incurred inside a firm. In the Wilkerson company, materials and labor costs are centered around the prices of materials and labor rates.

Read More
1770 Words | 8 Pages

Also, various methods of controlling costs such as standard costing system and flexible budgets have close relation with the variable costing system, in turn making it easy to use those methods. 3. Companies using variable costing system are able to prepare income statement in contribution margin format that provides necessary information for cost volume profit (CVP) analysis. On the flip side, this data cannot be directly obtained from a traditional income statement prepared under absorption costing

Read More
1407 Words | 6 Pages

In this case analysis, Global Electronics, Inc.’s HDTV division is attempting to decide whether or not to go forward with an ultra-high-definition television (UHDTV) project that would require fairly significant additional capital expenditure. Violet Cunningham is the capital planning manager is for the division and is responsible for consolidating various inputs for the proposed project including sales, expenses, and tax rates, and use these to calculate its internal rate of return (IRR) and payback period. While Violet’s initial calculations placed the IRR at 10 percent (below the 12.5 percent cost of capital benchmark), she subsequently revised the price and expense inputs to achieve a more attractive IRR of 13.5 percent. However, she is not completely certain which calculation is truly valid, as she has reservations regarding which outcome is more probable.

Read More
1614 Words | 7 Pages

In terms of controlling, the management of Marks and Spencer has frequent reporting of expenditures with costs to provide a form of feedback. The reactions of managers to such type of data rely on the expectations or the formal budget or planned targets. The management believes in collecting and assigning cost data that is being shifted away from control. There is a recognition related to the repetitive exercise of planning and re-planning for creating a full time job for accountants. The assessment and evaluation of cost data in the aspects of launching new product by Marks and Spencer is about gaining insights and learning ways for achieving the goals of organisation in most effective manner.

Read More

More about Apple Non Gaap Essay

Related Topics

Open Document