HP’s “marriage” to Autonomy apparently isn’t working, but it seems Autonomy may have been hiding something. Who do you think bears the blame? Whitman? Apotheker? Lynch? the auditors? Investment bankers? Others? If true that sales of hardware were booked as sales of software, why does this matter if bottom line (net income) was unaffected? Where was COGS reported?
Do you think the contemplated “expected loss” model in accounting for loan impairment is “better” than the current “incurred loss” model? If so, how? For whom?
Capex is trending down for major corporations. Do firms have to provide investors with their planned capex for the next year(s)? If so, where? Is this sort of information useful? If so, why?
UBS is shutting down much of its investment banking services because it isn’t covering its cost of capital. How do you think it measures its cost of capital? Why do you think UBS’s stakeholders appear to be less patient than those at other banks?
Why do you think the author attributes so much of the basis (and “success”) of capitalism to the simple bookkeeping method of the double entry system? How did the notion of “profit” fit into the religious views of the time?
Why do you think it is a “battle” to try to bring leases on-balance-sheet? Why does it matter if the information about lease contracts is in the notes or on the balance sheet? To whom, besides standard setters, does it (or should it) matter?
If you are a young student or someone just entering the workforce, is retirement income a concern to you? Why or why not? Do you know what kind of pensions (if any) your parents have: defined benefit or defined contribution? If you end up having a pension, do you know what kind it is likely to be? Why? Why do you suppose public sector pensions are more likely to be defined benefit plans?
HarperCollins is closing warehouses for printed books. Do you think this move surprises investors? Why or why not? Will HarperCollins likely book an impairment loss? A restructuring charge? Why?
Do you think that Hyundai will accrue a contingent liability for the false mileage claim? Why or why not? Assuming they do, what would the “journal entry” be? How do you think investors will react to the false claim?
What are some implications of federal tax policy and the allocation of capital? What suggestions would you have for politicians?
There was tension and controversy about whether the FASB should also be given the task of standard setting for private companies, in addition to public companies. Do you believe the processes and players, just put in place, will be responsive to private companies’ concerns?
Is it necessary to converge US GAAP and IASB? Why or why not? Is it necessary for the two standard setters to have a good working relationship? Why or why not? Your best guess: where will we be in 5 years? Where we are now? Converged? Other?
Why do you think it was “necessary” for the IFRS supporters to “push back” against the SEC report on IFRS? How did the push-back address the issue of the cost of conversion?
Can you identify at least five differences between “model” U.S. GAAP financial statements and “model” IFRS financial statements? Would any of these differences affect your assessment of a firm?
What’s the threshold that banks need their ROE to hit? Why do analysts and investors claim this is “the magic number”? What are ways to hit this magic number? Do banks have incentives to do so?
The CEO of Citi suddenly resigned. Is there sufficient evidence to conclude that boards are “taking charge”? Is it desirable for boards to be more assertive? Why or why not?
How do you think releases of loan loss reserves would affect banks’ stock prices? That is, do you think investors consider these releases to increase the value of the firm? Why or why not? If so, how?
Why do firms (sometimes) blow the whistle on themselves? How can a firm in one country be assured that firms in other countries would investigate their own breaches of the FCPA?
