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What accounting conventions do the two companies follow, US

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Part II. Refer to the latest annual financial statements for the two following companies: Apple and Philips.

Clearly identify the companies, the time period, and include the link to the financial statements you are analyzing in your report.

What accounting conventions do the two companies follow, US GAAP or IFRS?

What about auditing standards for the two companies?

Locate the income statement for the past two years for both companies. Prepare a table comparing five items or more from each statement. This part it is important, you need to develop a comparison table, showing your knowledge on the subject

Comment on the changes from one year to another. Is the company doing better or worse? Did revenues and expenses increase or decrease?

Is it easy to discern trends or compare the information from year to year and between the two companies? Please, comments on both aspects and show some examples.

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Solution Summary

Your tutorial is 559 words, including a table of nine differences between Apple and Philips based on review of the 2010 and 2011 income statements.

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Apple vs. Philips

Time period

I got the 2011 Annual Report for Philips and the Form 10-K for Apple from the Investor Relations section of their respective websites for use in responding to these questions. The URLs are shown below:

http://www.newscenter.philips.com/main/corpcomms/resources/corporate/investor/ar2011/Annual_Report_English_2011.pdf
http://files.shareholder.com/downloads/AAPL/1812907363x0xS1193125-11-282113/320193/filing.pdf

Accounting conventions

Apple financial reporting adheres to US GAAP but Philips follows IFRS. You can see this in the formats of the financial statements. For instance, the balance sheet starts with the most liquid under US GAAP and the least liquid under IFRS.

What about auditing standards for the two companies?

Although the accounting framework is different, the auditing procedures used to figure out if the accounting reporting are fairly reported in accordance with the stated framework were both in accordance with requirements of ...

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Carol Sargent, PhD
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  • MSc, University of Virginia
  • PhD, Georgia State University
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