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Implementation of service learning in an accounting course yielded five success factors: institutional and individual conviction of its value, alliances with community agencies, intellectual and instructional legitimacy, faculty and student motivation, and appropriate assessments. The service learning component works best when it is optional and involves 15-20 hours. (Contains 31 references.) (SK)

The study compared the improvement in computational skills of two similar groups of accounting students, one using calculators in examinations and the other not. Not using calculators seems to improve the arithmetical ability of students, but does not significantly improve students' feel for numbers or ability to solve word problems. (CH)

This case pertains to the interplay of cost accounting, performance measurement, and financial reporting issues in Toshiba's semiconductor business. It addresses how Toshiba manipulated its reported profits by inappropriately allocating its budgeted fixed overheads and not recognizing inventory losses in a timely manner in the financial statements. These manipulations overstated profits of the semiconductor business by ¥36.0 billion, almost a quarter of the total of Toshiba Corporation's ¥151.8 billion profit overstatement. The investigation report indicated that the profit manipulations were a likely outcome of top management's unrealistic expectations. For the semiconductor business of Toshiba, the timely recognition of inventory losses would have offset the profit misstatements resulting from the inappropriate allocation of budgeted fixed overheads. Alternatively, proper allocation of budgeted fixed overheads would have reduced or even avoided the need to recognize inventory losses. The case provides an integrative view of cost and financial accounting. [ABSTRACT FROM AUTHOR]

SYNOPSIS: In October 2019, the Financial Reporting Policy Committee of the Financial Accounting and Reporting Section of the American Accounting Association submitted a comment letter to the Financial Accounting Standards Board regarding the accounting for certain identifiable intangible assets acquired in a business combination and subsequent accounting for goodwill. This paper summarizes the content of the comment letter and discusses opportunities for future research on intangible assets that may inform accounting standard-setting decisions. JEL Classifications: M40. [ABSTRACT FROM AUTHOR]

Each year, millions of people donate blood at blood centers run by not-for-profit organizations such as the American Red Cross, which supply blood products to hospitals. Many people can also give blood plasma and receive cash compensation from for-profit pharmaceutical companies, which use plasma to develop and manufacture medical products. Blood donations raise interesting accounting issues. How should the blood and plasma donations be accounted for by a not-for-profit organization and a for-profit company, respectively? How are these similar transactions manifested differently in their financial statements? Is the accounting treatment consistent with the objectives of the entities? What are the ethical and social issues in paying for plasma donation? The case leverages students' familiarity with accounting standards for business enterprises to deepen their understanding of not-for-profit accounting. The case also challenges students to think critically about accounting concepts and improve their Codification research skills. [ABSTRACT FROM AUTHOR]

This real-world comprehensive case provides an experiential assignment to bring alive most major topics addressed in the financial statement analysis and valuation course. By demonstrating the interconnections between different topics, the case also serves as an integrative assignment to develop a holistic understanding of the course. The case presents a platform to develop students' critical-thinking and problem-solving skills. By requiring them to apply the frameworks of strategy and industry analysis, techniques of accounting and financial analysis, and by placing them in the role of a financial analyst, the case develops an understanding of the challenges involved in financial analysis and valuation in a real-world context. The case helps students to experience the power of using financial statements and other publicly available information to derive insights into firm valuation and to appreciate the role of accruals-based and real earnings management in stock valuation. [ABSTRACT FROM AUTHOR]

This case aims to help you understand how a world-known Japanese conglomerate—Toshiba Corporation—managed its earnings using the percentage-of-completion method to account for construction contracts in its Energy and Infrastructure division. In response to inquiries from Japan's Securities and Exchange Surveillance Commission (SESC) and internal investigations, Toshiba restated its earnings for an extended period (2008–2014) by the staggering amount of $1.86 billion. Twenty-one percent of this amount related to its improper accounting for construction contracts. The case requires you to research authoritative accounting literature, evaluate Toshiba's accounting practices, and determine which GAAP-compliant procedures Toshiba should have followed. The case assignment intends to improve your ability to (1) identify, interpret, and apply the new revenue recognition standard (ASC 606), (2) appreciate the distinction between a company's stated accounting policies and their implementation, (3) recognize the importance of estimates and judgments in the accounting process, and (4) understand the critical role played by the senior management and organizational culture in the assurance of integrity in financial reports. [ABSTRACT FROM AUTHOR]

Diamond Foods is America's largest walnut processor specializing in processing, marketing, and distributing nuts and snack products. This real-world case presents financial reporting issues around the commodities cost shifting strategy used by Diamond's management to falsify earnings. By delaying the recognition of a portion of the cost of walnuts acquired into later accounting periods, Diamond Foods materially underreported the cost of sales and overstated earnings in fiscal 2010 and 2011. The primary learning goal of the case is to help students understand the anatomy and motivations of earnings manipulation. Specifically, students will have the opportunity to (1) apply the FASB's Conceptual Framework to a real-world context, (2) determine the nature of errors and compute their numerical effects on financial statements, (3) understand motivations for earnings management and actions needed for managing earnings of future years, (4) explain the anatomy of financial reporting fraud by reconstructing journal entries, (5) prepare comparative financial statements for retroactive restatements, (6) explain the rationale for clawback provisions in compensation contracts, and (7) understand the difference between the real and accrual-based earnings management. [ABSTRACT FROM AUTHOR]

Sachiko is a comprehensive case on financial statement analysis within an international context. Upon reviewing the financial statements and relevant footnotes of Sachiko Corporation, a Japanese company, and U.S.-based Radiance Inc., you are required to restate the two companies' financials to evaluate whether the revised ratios are consistent with each company's strategy and business environment and, subsequently, to recommend the better investment prospect. The case provides a forum for you to examine the role of environmental differences (cultural, institutional, business, and financial reporting) in interpreting the risk and profitability ratios in an international context. [ABSTRACT FROM AUTHOR]

Reliance Corporation, a leading manufacturer of analog and mixed signal products and high performance memory products, experienced a significant downturn in 2004, resulting in a substantial inventory write-down of the memory products inventory. This case requires you to examine the issues of inventory valuation and disclosures and managerial motivations in managing earnings. A recovery of inventory values in the first quarter of 2005 provides a setting for evaluating subsequent financial statement reporting and for understanding the importance of ethics in financial reporting decisions. This case also provides you with an opportunity to research accounting literature, apply an accounting standard to a realistic setting, appreciate the judgments involved in financial reporting decisions, and understand difficulties in the evaluation of materiality. [ABSTRACT FROM AUTHOR]

The article explores teaching ideas on the appropriateness of accounting policy for ensuring a faithful representation of underlying economic reality. Sun Airlines Inc. (SAI) is a regional air carrier that flies primarily east of the Mississippi River. To remain competitive, SAI has started to aggressively market electronic ticketing through its Internet Web site. SAI was also one of the first regional airlines to adopt a frequent flyer plan (FFP) that was competitive with FFP of national airlines. Mark Flaherty, the CEO of SAI for the past seven years has been instrumental in making the company profitable. However, he has become increasingly concerned over the company's deteriorating current ratio and the possibility that SAI would no longer be in compliance with the debt covenant of a major creditor. The case is very appealing to students because of their familiarity with point and loyalty programs. In particular, the case can be used to enhance the appreciation of decision modeling, research, leveraging technology, and strategic/critical thinking. Because of the variety and complexity of issues addressed the case is most effective as a group project.

Presents a case study of accounting for frequent flyer plans to analyze financial reporting problem using the Generally Accepted Accounting Principles (GAAP). Definition of the problem; Prevalence and financial significance of the problem; Getting familiar with industry, financial reporting environment and accounting practices; Development of objective criteria; Solution approach.

This article discusses various theoretical and practical issues related to purchase commitments and recommends a unifying framework to guide accounting and disclosure practices. Many businesses enter into contracts to purchase goods at fixed prices in order to ensure a continued supply of the goods or as a hedge against price increases. During the period that such contracts are outstanding, fluctuations in the prices of the underlying goods can have significant effects on the financial statements. The accounting literature provides no single comprehensive discussion of the issues involved in accounting for purchase commitments. This has led companies to adopt widely varying practices. A review of the financial statements indicates that many of the reported losses on purchase commitments have had a substantial impact on companies' net incomes. While accounting for purchase commitments may not be a very widespread problem, it is a problem that can have a significant effect on a company's bottom line and has largely been neglected by accounting policy makers. This article recommends solutions to problems in accounting for purchase commitments.