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This case depicts a financial analyst trying to make sense of Starbucks' finances and drawing from recent projects of the IASB and FASB to identify lease accounting as a key issue for the firm. The case underscores the importance of having a full picture of a company's obligations in order to understand its overall performance. In reviewing the case, students examine Starbucks' extensive use of leases and use spreadsheet tools to understand the full extent of the corporation's indebtedness. Although heavy users of leases such as Starbucks have argued that lease accounting is complex, an estimation of lease indebtedness can be made using relatively simple tools that are easy for students to understand. The case allows issues of high-level accounting standards to be elucidated, using a well-known company with which students identify. The case illustrates the real-world consequences of accounting policy choices.

Spreadsheet to accompany product 9B18B022.

On April 30, 2018, the athletic director of Grand River University was drafting a plan for his department to be reviewed by the school’s board of trustees. Grand River University was a small university supporting several varsity sports teams that competed regionally and nationally. The men’s hockey, men’s basketball, and women’s basketball programs had struggled in recent years. In fact, the women’s hockey program had been cut several years earlier. The school wanted to reduce the athletics program’s dependence on grants. With the university facing increasing costs and stagnant revenue, the athletic director had to provide information that clearly outlined the cost to the school of each program and athlete. A group of researchers had used activity-based costing to show that the actual cost of having a team was much higher than schools had reported. The athletic director wondered what his school’s costs would look like after applying that method to his calculations.

Based in Omaha, Nebraska, Berkshire Hathaway Inc. is a holding company that invests in many diverse businesses. The most significant of those are property and casualty insurance businesses, although the company owns businesses in the railroad, utilities, energy, and finance industries as well. The case focuses on accounting for investments at Berkshire Hathaway. The company adopted the new US guidance (ASU 2016-01) on accounting for investments in its 2018 10-K, and key excerpts from that report comprise much of the case. Students are asked to review Berkshire Hathaway's financial statements and the footnotes related to its investments, consider the method of accounting for those investments, and decipher their impact on the financial statements.

An organization's culture can be a significant source of sustainable competitive advantage. For the organization, it can attract job candidates who fit and align employees working in different teams around common goals. For employees, a strong culture can generate pride, satisfaction, and purpose. However, a strong organizational culture can easily decay with a company's growth as new employees join the firm and business units develop cultures of their own. This technical note proposes that the growth a company can sustain while preserving its culture is governed by its ability to attract employees who fit with its purpose and values and to preserve and foster this alignment over time. To achieve this, an effective leader must formally articulate the purpose and values of the company and rely on four management systems that can be collectively thought of as a "North STAR" orienting managers' and employees' attention in the intended direction. This note details these organizational capabilities and management systems and describes the steps that successful companies take in order to preserve a strong culture through periods of growth.

This case asks students to review 10 columns of financial data drawn from 10 different companies and to match each with an industry in a list of 10 industries.

Building on his father's legacy, Omar Alghanim (MBA 2002) had been working on strengthening a performance-driven culture based on meritocracy in the family business, Alghanim Industries. The task had been particularly challenging because of traditional Middle East practice of relying on relationships and influence to conduct business. Omar's vision attracted and empowered like-minded employees who were rewarded on merit and who delivered on the firm's mission of providing excellent service to its customers. Together, they revamped the company's performance and compensation system and established a well-structured control and compliance mechanism. The next challenge for Omar was to transform the workforce from a mono-culture, male-dominant expat community to a diverse mix of people, cultures, backgrounds, and viewpoints. In particular, he needed to find a way to attract talented women and local Kuwaitis to become part of his organization.

In 2017, the president and co-owner of MacKinnon Industries was considering the opportunity to diversify his business and bring a former family business back into the MacKinnon family. With an extensive background in acquiring and managing manufacturing businesses, he now had an opportunity to purchase Corkford Brewery Inc. (Corkford Brewery). The deal included the land, building, and equipment, as well as four successful brands from Tanzer Brewing Company, which owned Corkford Brewery. MacKinnon wanted to evaluate the financial viability of the business venture under three different potential operating scenarios, assess the potential of adding ciders to the product mix, and consider the price that he would be willing to pay to acquire the business.

This case provides instructors with an opportunity to discuss some of the fundamental aspects of a typical public company's shareholders' equity financial reporting and financial disclosures. As such, students are provided with information pertaining to PepsiCo's common stock, preferred stock, stock repurchases, cash dividends, stock splits, and GAAP earnings per share (EPS) versus non-GAAP EPS. In addition, the case also provides an interesting bit of information regarding PepsiCo's 2017 move from the NYSE to the Nasdaq.

This note, which serves as a glossary, was constructed to ease the transition of students into financial accounting courses. The glossary includes both foundational terms that are widely used and terms introduced in one or more common financial accounting cases. The terms are explained in a manner that aims to inform both novice and advanced students.

This note, which serves as a glossary, was constructed to ease the transition of students into financial accounting courses. The glossary includes both foundational terms that are widely used and terms introduced in one or more common financial accounting cases. The terms are explained in a manner that aims to inform both novice and advanced students.

Following the uncertainty of regulatory reform under Brexit and the new Trump administration era, this installment of Accounting Matters explores the future of international financial reporting standards (IFRS). I interviewed Mr. Hans Hoogervorst, Chairmanof the International Accounting Standards Board (IASB), and Mr. Michael Izza, Chief Executive of the Institute of Chartered Accountants in England and Wales (ICAEW). The two give their opinions on what they see as the lasting impact of Brexit and the Trump era on their organizations and accounting standards internationally.

This case, set in June 2018, chronicles the challenges that Jack Sim, self-made millionaire and founder of the World Toilet Organisation (WTO), encountered in his decades-long quest to clean up dirty public toilets in Singapore's coffeeshops and hawker centres. A key obstacle he faced was the lack of quantitative data on toilet cleanliness, and the means to obtain it. Moreover, the majority of coffeeshop operators were resistant to investing in toilet cleaning. In November 2015, Sim visited Rosie Ching, a senior statistics lecturer at Singapore Management University (SMU), and after lengthy discussions, Ching developed a rigorous toilet cleanliness survey and a Toilet Cleanliness Index (TCI). TCI received great attention from the media and the public, but now in early 2018, Sim was doubtful: Could Singapore's dirty public toilets be cleaned up in the foreseeable future? Would the TCI effect a change for good and convince stakeholders of the necessity to act on the matter?

Preparing for a potential interview, an MBA graduate reads extensively about Daimler AG. She learns about company's longtime presence in China manufacturing luxury automobiles and its continued investment in manufacturing and R&D capacity in that country. She also learns that the company financed part of its operations and growth in China by issuing bonds in both China and Hong Kong and wonders whether the company would return to those bond markets.

An MBA graduate prepares for a possible interview with Caterpillar Inc. by reading about the company's longtime presence in China manufacturing heavy equipment and its continued optimism about the heavy equipment market in that country. He also learns that the company financed part of its operations and growth in China by issuing bonds in Hong Kong and wonders whether the company would return to that bond market in Hong Kong.

In June 2018, an intern at an investment firm was given the task of assessing the financial condition of Bon-Ton Holdings, Inc. (Bon-Ton), a leading US department store chain. In January 2018, it had entered into forbearance agreements with some of its lenders and announced store closures at 42 locations as part of its rationalization program. On February 4, 2018, it filed a voluntary petition for protection against bankruptcy and for reorganization. With the US retail industry already having witnessed more than 15 bankruptcies in 2017-the most in the last six years-would Bon-Ton survive? What measures could the company take to fight bankruptcy? What actions might put the company back on track?

Founded in 2008, Harsh Electricals was a supplier of electrical goods and home appliances to retailers in three states of southern India. After the company's first few years of success and high profitability, the founder observed a steep decline in profits. In 2013, the founder was considering shifting the business to manufacturing and supplying air coolers, but needed to build a business plan that addressed the costs of manufacturing, the break-even point, and the new venture's projected financial statements.

Spreadsheet to accompany product 8B19B003.