Case Map for Stickney/Weil: Financial Accounting: An Introduction to Concepts, Methods and Uses, (Thomson)

This map was prepared by an experienced editor, not by a teaching professor. Faculty at Harvard Business School were not involved in analyzing the textbook or selecting the cases and articles. Every case map provides only a partial list of relevant items from HBS Publishing. To explore alternatives, or for more information on the cases listed below, visit: hbsp.harvard.edu

PART I: OVERVIEW OF FINANCIAL STATEMENTS Chapter 1 Introduction to Business Activities and Overview of Financial Statements and the Reporting Process Abstract Thumbs-Up Video, Inc.: William A start-up video rental business is described to provide a basis for a J. Bruns Jr., Eric J. Petro bookkeeping and financial reporting exercise for an accounting Product #: 189193 course. Both start-up and operating transactions are included along with situations requiring judgments about depreciation policies and Length: 3p end-of-period adjustments. Teaching Note: 191034 Subjects Covered: Accounting policies; Accounting procedures; Development stage enterprises; Financial statements Chapter 2 The Basics of Bookkeeping and Financial Statement Preparation Abstract PART II: ACCOUNTING CONCEPTS AND METHODS Chapter 3 Balance Sheet: Presenting and Analyzing Resources and Financing Abstract Maria Hernandez & Associates: This case presents the situation of an unemployed web page designer who starts a new consulting firm with personal savings and William J. Bruns Jr. a family loan. Two months later, she is to report on operations to her Product #: 902401 father, using financial reports she must design and construct. Length: 2p Learning Objective: To introduce accounting concepts, principles, Teaching Note: 905402 and reports. Chapter 4 Income Statement: Reporting the Results of Operating Activities and Abstract Financing Chemalite, Inc.: David A. Wilson A chemical engineer who has set up a company to manufacture and Product #: 177078 market one of his inventions is trying to prepare his state of the corporation report. This case is designed to serve as a vehicle to Length: 3p introduce students to basic bookkeeping and accounting functions. Teaching Note: 193063 Subjects Covered: Accounting procedures; Financial statements; Valuation

Chapter 5 Statement of Cash Flows: Reporting the Effects of Operating, Investing, and Financing Activities on Cash Flows Statements of Cash Flows: Three Examples: William J. Bruns Jr., Julie H. Hertenstein Product #: 193103 Length: 8p Teaching Note: 193173 Chapter 6 Introduction to Financial Statement Analysis Colgate-Palmolive Co.: Analyzing an Annual Report: William J. Bruns Jr. Product #: 196116 Length: 13p Teaching Note: 198025

Abstract This case introduces the statement of cash flow through three examples of multi-year statements of cash flows from three unidentified companies. Learning Objective: To introduce the statement of cash flows now required in the United States. To examine cash flows, and analyze profitability of operations, investment policies, and financing.

Abstract A directed analysis of the Colgate-Palmolive Co. annual report. Focuses on the basics of reading an annual report including analysis of financial statements, calculation of financial ratios, and study of the layout and message of the report. Industry financial ratios are included for comparison. Subjects Covered: Accounting procedures; Financial analysis; Financial ratios; Financial statements; Industry analysis PART III: MEASURING AND REPORTING ASSETS AND EQUITIES USING GENERALLY ACCEPTED ACCOUNTING PRINCIPLES Chapter 7 Revenue Recognition, Receivables, and Advances from Customers Abstract Circuit City Stores, Inc. (A): Circuit City sells consumer electronic equipment, appliances, and William J. Bruns Jr., Susan S. extended service and warranty contracts which supplement those Harmeling provided by equipment manufacturers. Equipment is sold at low margins, while warranties carry very high margins. A question has Product #: 191086 been raised about the proper method for recognizing revenues on Length: 11p the warranty portion of the combined sale. Deferring revenue will cut Teaching Note: 193138 profit reported at the time of sales but may better match costs of warranty service. Subjects Covered: Accounting policies; Accounting procedures; Financial statements; Marketing strategy Chapter 8 Working Capital Abstract Chapter 9 Long-Lived Tangible and Intangible Assets Accounting Fraud at WorldCom: Robert S. Kaplan, David Kiron Product #: 104071 Length: 18p Teaching Note: 105083 Abstract The principal players in WorldCom's accounting fraud included CFO Scott Sullivan, the General Accounting and Internal Audit departments, external auditor Arthur Andersen, and the board of directors. The case provides sufficient detail to allow for a full discussion of the pressures that lead executives and managers to "cook the books," the boundary between earnings smoothing or management and fraudulent reporting, the role for internal control systems and internal audit to prevent or rapidly detect accounting

Depreciation at Delta and Pan Am: William J. Bruns Jr., Eric J. Petro Product #: 190035 Length: 10p Teaching Note: 191035 Chapter 10 Notes, Bonds, and Leases Chapter 11 Liabilities: OffBalance-Sheet Financing, Retirement Benefits, and Income Taxes Accounting for Frequent Fliers: William J. Bruns Jr., Susan S. Harmeling Product #: 192040 Length: 7p Teaching Note: 193183

fraud, the expectations about governance processes performed by external auditors and the board of directors, and the pressure and consequences when middle managers follow orders that they know are wrong. Written from the public record, the case contains numerous quotes from an individual involved in the WorldCom fraud that were reported by the Investigative Committee and Wall Street Journal articles about several of the individuals caught up in the situation. Learning Objective: To analyze how the largest accounting fraud in history was perpetrated and what processes, structures, and organization culture could prevent frauds from occurring in other organizations. Depreciation policies of Delta Air Lines and Pan Am Corp. are compared and contrasted against a summary of operating data from each airline. Questions with the case require projection of future depreciation on a new aircraft using the policies of each company. Subjects Covered: Accounting policies; Accounting procedures; Financial statements Abstract

Abstract Airline frequent flier programs offer members the opportunity to earn free flights by accumulating mileage. Accounting and reporting the obligations of airlines and the cost of frequent flier programs raises difficult measurement issues. In 1991, the U.S. Securities and Exchange Commission began to require airlines to disclose the number of free flights program members took. The case allows estimates of the cost and obligations of the United Air Lines program. Subjects Covered: Accounting procedures; Cost accounting; Cost allocation; Financial statements; Liability Abstract Gives an overview of accounting for equity investments less than 20%. Uses this accounting to introduce the issue of amounts included in the statement of comprehensive income during a different time period from its inclusion in net income (sometimes called "recycled earnings"). Subjects Covered: Accounting; Financial statements; Income; Investments An assistant is asked to prepare illustrative derivative and hedge accounting examples for the audit committee. Students are required to complete the examples. Teaching Purpose: Introduces students to the basics of derivative and hedge accounting. Subjects Covered: Accounting procedures; Currency; Derivatives; Financial accounting; Financial statements; Hedging; Machinery

Chapter 12 Marketable Securities and Derivatives Accounting for Marketable Securities and the "Recycling" of Income: Gregory S. Miller Product #: 106025 Length: 4p

Machinery International (B): David F. Hawkins Product #: 101061 Length: 5p Teaching Note: 101075

Chapter 13 Intercorporate Investments in Common Stock Chapter 14 Shareholders' Equity: Capital Contributions, Distributions, and Earnings Butler Capital Partners and Autodistribution: Putting Private Equity to Work in France: Walter Kuemmerle, William J. Coughlin Product #: 800224 Length: 29p Teaching Note: 803067

Abstract

AOL Time Warner: Mary E. Barth, Hilary Stockton Product #: A171 Length: 39p

Abstract Describes a proposed buyout transaction of Autodistribution, an entrepreneurial firm that is the leading car-parts distributor in France. The deal became feasible because of a failed takeover battle for Autodistribution's parent company. Private equity investor Butler Capital Partners must make an investment decision within three weeks. Other private equity firms compete with Butler for the deal. Butler must assess the potential for margin improvement and expansion within France and to other European countries. Furthermore, since the price for the deal is set, Butler must focus on finding an advantageous structure for all parties to secure the deal. Learning Objective: To assess the feasibility of a private equity transaction in France, valuation of a car-parts distributor, and structuring executive compensation. AOL investor Fred Grant was surprised and disappointed by the January 10, 2000 announcement of the AOL Time Warner merger. He had been fortunate enough to buy AOL at $40 in October 1999, just prior to the stock's rapid rise to $95 in mid-December. Although just days prior to the merger announcement the stock had settled to $73, by February 2, 2000, it had suffered another decline--to $57 per share. Although many observers spoke in glowing terms of the enormous synergies between Time Warner's premier content, advertising, and cable distribution channels and AOL's Internet brand, marketing savvy, and subscriber base, analysts predicted that growth for the merged company would be in the 15%-20% range, one-half of what Grant expected for his AOL holdings. Analysts also warned of the management and execution risks associated with the enormous and unprecedented combination of Internet and traditional media businesses. Finally, Grant was concerned about the implications of AOL Time Warner's use of the purchase rather than pooling method to account for the deal. Why wouldn't the company use pooling accounting, as had other companies for large stock deals such as NationsBankBankAmerica and Travelers-Citicorp? Would goodwill's dampening effect on earnings hurt the market valuation of the new company? As Grant watched his AOL stock slide in the days following the merger announcement, he wondered whether he should sell his shares or, as some analysts suggested, use these new lows as a buying opportunity. Subjects Covered: Accounting procedures; Internet; Mergers; Stocks

PART IV: SYNTHESIS

Chapter 15 Statement of Cash Flows: Another Look Crystal Meadows of Tahoe, Inc.: William J. Bruns Jr. Product #: 192150 Length: 6p Teaching Note: 193128

Abstract An introductory case in cash flow analysis and the preparation of statements of cash flows. Based on the 1991 income statement and balance sheet at a ski resort company, the case provides additional information which allows a student to prepare both a direct and an indirect statement of cash flows. A rewritten version of an earlier case. Subjects Covered: Accounting policies; Cash flow; Management accounting

Chapter 16 Synthesis of Financial Reporting Abstract