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Metallgesellschaft AG is a commodity and engineering conglomerate based in Frankfurt am Main, Germany. Metallgesellschaft Corp., a New York based subsidiary of the group, has made oil trading and hedging errors that could drive the group into insolvency. The impact of hedge accounting rules on the quality of the information available to top management is examined.

Describes principal differences between U.K. and U.S. accounting standards.

Discusses global accounting policies for intangible assets other than goodwill. How financial analysts deal with the diversity in these practices is also covered.

Discusses accounting for intercorporate investments and the preparation of consolidated statements. U.S. and non-U.S. accounting standards are covered with emphasis on SFAS No. 52.

Discusses quality of earnings analysis and its relevance to security valuation.

Management must decide which first quarter's earnings numbers to report. The company is classified by its securities market as a "growth" company. The corporate controller prefers a quarterly earnings figure that represents a decline in earnings.

Management is debating a proposal to capitalize R&D. While Swedish GAAP permits capitalization, the general practice is to expense R&D as incurred.

Spreadsheet Supplement for case 193166

Describes the use of common financial ratios to analyze a firm's performance and financial condition. Discusses fundamentals of equity valuation. Based on an earlier note by the same author.

Presents a discussion of earnings quality --characteristics, relationship to earnings multiple, application and measurement, volatility and risk, as they affect earnings quality.

Spreadsheet Supplement for case 178126.

An abstract is not available for this product.

Concerns management control at the divisional level, and the use of budgets.