What Will the Future Bring for Lease Accounting?
December 9, 2009 by admin
Filed under All Articles
CEOs and CFOs are cautiously eyeing the limitations that convergence of FASB and IFRS standards may bring to lease accounting. Predictions are that a new global lease standard, anticipated in 2011, will require many traditionally classified operating leases into the capital lease status.
QUESTIONS:
- What are the current FASB criteria for classifying leases as either operating or capital leases?
- What is the general concept that the FASB and IASB are considering as the way to distinguish between capital and operating leases?
- Explain how this new reclassification would cause “balance sheet blues†and companies that lease to “appear more highly leveraged?â€
SOURCES:
Johnson, S. (2009). “Balance-Sheet Blues,†CFO (Retrievable online at http://www.cfo.com/article.cfm/14457794/c_2984368/?f=archives)
What are Non-GAAP Financial Measures?
December 9, 2009 by admin
Filed under All Articles
Amgen is a biotechnology firm that develops and manufactures human therapeutics that fight cancer, kidney disease, rheumatoid arthritis and other serious illnesses. As part of its 2008 financial report, the Company issued non-GAAP financial measures to facilitate additional analysis by investors.
QUESTIONS:
- In one paragraph, briefly describe non-GAAP financial measures and how they differ from GAAP.
- Does the SEC allow non-GAAP financial measures?
- What non-GAAP financial measures did Amgen report? Explain some of specific issues they addressed in this supplemental information.
SOURCES:
PR Newswire. (2009). Amgen’s Fourth Quarter 2008 Adjusted Earnings Per Share Increased 6 Percent to $1.06; Full Year 2008 Adjusted Earnings Per Share, Fierce BioTech (Retrievable online at http://www.fiercebiotech.com/press-releases/amgens-fourth-quarter-2008-adjusted-earnings-share-increased-6-percent-1-06-full-year#ixzz0Yk4GRVCZ)
U.S. Securities and Exchange Commission. (2002). Final Rule: Conditions for Use of Non-GAAP Financial Measures, Release No. 33-8176; 34-47226; FR-65; FILE NO. S7-43-02 (Retrievable online at http://www.sec.gov/rules/final/33-8176.htm)
