SEC (2015) The role of the SEC. However, the convergence project between IASB and FASB should adopt a more stringent approach like US GAAP as a global accounting standard for revenue recognition policy (Dennis 2008). In the US, the Financial Accounting Standards Board (FASB) is responsible for any changes to the financial reporting standards used at the corporate level (FASB 2015). Company history is provided in the first half of the case. http://www.bbc.co.uk/news/business-15161453, http://dealbook.nytimes.com/2012/11/20/autonomys-ex-chief-h-p-s-claims-completely-and-utterly-wrong/, http://dealbook.nytimes.com/2012/11/20/h-p-takes-big-hit-on-accounting-improprieties-at-autonomy/?_php=true&_type=blogs&_r=0, Accounting Scandal of HP and Autonomy Case Study. The next step is organizing the solution based on the requirement of the case. The difference in timing when recognising revenue was associated with the disparity in calculation of fair value of each product. You should try to understand not only the organization but also the industry which the business operates in. My case study strategy involves -, Once you are comfortable with the details and objective of the business case study proceed forward to put some details into the analysis template. Amazing Business Data Maps. Diagram 2: US and UK cultural comparisons (Hofstede 2015). Fern Fort University. Consequently, FIFO would mean that companies gain a larger profit margin, which would be perceived to be attractive by investors. (2014) “A proposed model to address convergence determinants, IFRS & FASB: Measurement and disclosure of revenue recognition”. A major difference between the accounting standards is that US GAAP has more options for valuating the inventory such as First in First out (FIFO), Last in First out (LIFO), and the weighted-average method, whereas IFRS restricts LIFO (Fosbre, Fosbre and Kraft 2010). This leads to either missing details or poor sentence structures.
Financial Times (2015) Serious Fraud Office closes Autonomy investigation. This is because sales revenue of a company is strongly associated with its inventory (Satin and Lin 2009). PWC (2012) IFRS and US GAAP: similarities and differences. The acquisition of Autonomy by Hewlett-Packard (HP) for the amount of $11.1bn was written down by $8.8bn in 2012 (Hurley and Hurley 2013). Zapranis, A. and Tsinaslanidis, P. E. (2012) “Identifying and evaluating horizontal support and resistance levels: an empirical study on US stock markets”. Garmong, S. K. (2012) “The state of major FASB IASB convergence projects”. 's Claims 'Completely and Utterly Wrong'. The variance in the number of options allows US GAAP-compliant companies to reduce its income tax.
The offer price paid to Autonomy was at £25.5 a share, a 64% premium over its previous day's stock price.
Another way of understanding the external environment of the firm in HP's Acquisition of Autonomy is to do a PESTEL - Political, Economic, Social, Technological, Environmental & Legal analysis of the environment the firm operates in.
Without FASB, any flaws in IASB’s accounting standards may not be highlighted (Cohn 2015). Fosbre, A. 2020, https://www.paperdue.com/essay/accounting-scandal-of-hp-and-autonomy-190443. Our case solution is based on Case Study Method expertise & our global insights. The enforcement of these standards the responsibility of the Securities and Exchange Commission (SEC), which was established after the stock market crash in 1929 to restore public confidence in the US Stock Exchange (Hodges and Mellet 2012). Stander, S., Buys, P. and Oberholzer, M. (2013) “Using the cultural dimension and accounting value classification frameworks to investigate cultural diversity in a multi-national south African-based company”. However, the monopoly of IASB in accounting standards may be detrimental to the purpose of financial reporting. So instead of providing recommendations for overall company you need to specify the marketing objectives of that particular brand. http://www.bbc.co.uk/news/business-15161453 Porter Five Forces is a strategic analysis tool that will help you in understanding the relative powers of the key players in the business case study and what sort of pragmatic and actionable case study solution is viable in the light of given facts. Copyright © Ivory Research Co Ltd, 2020. This segment also offers a critical analysis of the convergence project between IASB and FASB and the future of both accounting standards: whether there should be a monopoly or co-existence. You can do business case study analysis by following Fern Fort University step by step instructions -, Once you finished the case analysis, time line of the events and other critical details. Focus on the following -. It was the differences of software revenue recognition between US GAAP and IFRS that prompted HP to accuse Autonomy of booking licensing revenue upfront before deals were closed, inflating its revenue (Reuters 2012). Implementation framework differentiates good case study solutions from great case study solutions. They make assumptions and professional judgements when selecting an accounting method to adopt (Cieslewicz 2014). Business Unit Level Solution - The case study may put you in a position of a marketing manager of a small brand. B Lab and the Impact Assessment Evolution Case Study Solution, Minding the Analytics Gap Case Study Solution, Duetto: Industry Transformation with Big Data Case Study Solution, When Health Care Gets a Healthy Dose of Data Case Study Solution, The Ingenuity Imperative: What Big Data Means for Big Business Case Study Solution, Linear Regression: A High-Level Overview Case Study Solution, EdGE Networks: Making HR Intelligent Case Study Solution, Mastering the Market Intelligence Challenge Case Study Solution, Why Your Company Needs Data Translators Case Study Solution.
[online] Available at: http://www.iasplus.com/en-us/standards/ifrs-usgaap/inventories [Accessed 22 June 2015]. Once done it is time to hit the attach button. Consequently, companies adopting GAAP would be wary when engaging in future merger and acquisition activities with companies under IFRS jurisdiction, which protects investors’ interests. We make beautiful, dynamic charts, heatmaps, co-relation plots, 3D plots & more. http://dealbook.nytimes.com/2012/11/20/autonomys-ex-chief-h-p-s-claims-completely-and-utterly-wrong/ Hewlett-Packard completes Autonomy buyout. Autonomy Accounts (2015) Mike Lynch publishes an open letter to Hewlett Packard. International Research Journal 11 (3), 301-316. Sam, S., Smith, A. and Strickland, A. Satin, D. and Lin, R. (2009) “Is there LIFO after IFRS?” Academy of Accounting and Financial Studies 14 (2), 53-56. Walker, R. S. (2004) “The effect of recent US legislation and rule making on corporate compliance and ethic programmes”.
Haflich, F. (2014) “If GAAP goes, says higher to taxes and cyclicality”. Unlike FASB, these entities process and review the registration of accounting firms through the establishment of quality control (expertise of auditors and accountants) and ethical standards (independence of auditors and accountants) regulations (Spillane 2015). IAS (2015) Inventories: Key differences between US GAAP and IFRSs. CPA Journal 85 (5), 48-53. HP (2013) Annual Report 2013. Unlike IFRS, US GAAP requires VSOE to be used in all circumstances it is available and resort to TPE as an alternative only when deemed necessary. The acquisition of Autonomy by Hewlett-Packard (HP) for the amount of $11.1bn was written down by $8.8bn in 2012 (Hurley and Hurley 2013). [online] Available at: http://www.iasplus.com/en-gb/resources/ifrs-topics/use-of-ifrs-g20 [Accessed 21 June 2015]. Accounting Review 89 (3), 1115-1149. Often readers scan through the business case study without having a clear map in mind. As previously stated under Institutional Context, the differences and similarities of the US and the UK regulatory environment are strongly influenced by the countries’ cultures (McGillivary and Fung 2013). Once refreshed go through the case solution again - improve sentence structures and grammar, double check the numbers provided in your analysis and question your recommendations.
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