Walmart- Week 9 essay
WALMART: 1. Review the notes to the financial statements of the current fiscal year and determine whether the company had any accounting changes for any of the years reported. (Note: Most, if not all, of these changes will be as a result of accounting rule changes by the FASB). To what did those changes relate? 2. Briefly describe the nature of the changes identified in #1. 3. Review the notes to the financial statements of the current fiscal year and determine whether the company reported any proforma financial results for any of the years reported. (Note: This includes proforma results related to business acquisitions). 4. Briefly describe the purpose of the proforma disclosures identified in #3. DISCUSSION: One illustration of the impact that Statement No. 106 had on the earnings of several companies is the story of General Motors. Recall that General Motors reported a $33 billion decline in income in 1992. One-time "hits" such as this can make comparison of financial statements and ratios over time difficult. Compare and contrast the different methods for dealing with changes in accounting principle by either making a cumulative adjustment or restating the financial statements. The two opposing views are: • when a new standard is issued, all prior years' financial statements being disclosed with the current year's information should be restated to comply with the new standard. This is the approach now required under FASB ASC Topic 250. • a cumulative adjustment that summarizes the new standard's effect on prior periods is sufficient. This is the approach that was required at the time GM adopted Statement No. 106. -research paper writing service