I need to write about AVX Corporation's accounting choice. I can't find what I am looking for. Please help me.© BrainMass Inc. brainmass.com October 10, 2019, 4:53 am ad1c9bdddf
AVX Corporation' accounting choice
I need to write about AVX Corporation's accounting choice. I can't find what I am looking for. Please help me.
We need to understand that financial reporting should be done as per GAAP standards. As per the US GAAP "Financial reporting should provide information that is:
• useful to present to potential investors and creditors and other users in making rational investment, credit, and other financial decisions.
• helpful to present to potential investors and creditors and other users in assessing the amounts, timing, and uncertainty of prospective cash receipts.
• about economic resources, the claims to those resources, and the changes in them. "
For more details, Please see
One must follow the Accounting cycle to comply with the above US GAAP standards.
AVX Corporation' accounting choice is described from page 45 of the annual report, 2011:
Summary of Significant Accounting Policies:
AVX Corporation is a leading worldwide manufacturer and supplier of a broad line of passive electronic components and interconnect products. Our consolidated financial statements of AVX Corporation include all accounts and subsidiaries. All significant intercompany transactions and accounts have been eliminated. From January 1990 through August 15, 1995, we were wholly owned by Kyocera Corporation ("Kyocera"). As of March 31, 2011, Kyocera owned approximately 72% of our outstanding shares of common stock.
Use of Estimates:
The consolidated financial statements are prepared on the basis of generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. We base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from those estimates. On an ongoing basis, we evaluate our accounting policies and disclosure practices.
Cash Equivalents and Investments in Securities:
We consider all highly liquid investments purchased with an original maturity of three months (90 days) or less to be cash equivalents. Our short-term and long-term investment securities are accounted for as held-to-maturity securities and are carried at amortized cost. We have the ability and intent to hold these investments until maturity. All income generated from the held-to-maturity securities investments are recorded as interest income. Available-for-sale securities are classified as either current or long-term investments based on their underlying expected cash flows and are recorded at fair market value. Any unrealized holding gains and losses resulting from these securities are reported, net of tax, as a separate component of shareholders' equity until realized. Realized gains and losses and declines in value judged to be other than temporary, if any, are included in our results of operations.
We determine the cost of raw materials, work in process and finished goods inventories by the first-in, first-out ("FIFO") method. Inventory costs include material, labor and manufacturing overhead. Inventories are valued at the lower of cost or market (realizable value) and are valued at market value where there is evidence that the utility of goods will be less than cost and that such write-down should occur in the current period. Accordingly, at the end of each period, we evaluate our inventory and adjust to net realizable value. We review and adjust the carrying value of our inventories based on historical usage, customer forecasts received from the marketing and sales personnel, customer backlog, certain date code restrictions, technology changes, demand increases and decreases, market directional shifts, and obsolescence and aging.
Property and Equipment:
Property and equipment are recorded at cost. Machinery and equipment are generally depreciated on the double-declining balance method. Buildings are depreciated on the straight-line method. The estimated useful lives used for computing depreciation are as follows: buildings and improvements - 10 to 31.5 years, and machinery and equipment - 3 to 10 years. Depreciation expense was $61,738, $53,798 and $43,220 for the fiscal years ended March 31, 2009, 2010 and 2011, respectively. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of any such assets may not be recoverable. If the sum of the undiscounted cash flows is less than the carrying value of the related assets, we recognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the assets.
The cost of maintenance and repairs is charged to expense as incurred. Upon disposal or retirement, the cost and accumulated depreciation of assets are eliminated from the respective accounts. Any gain or loss is reflected in our results of operations.
Goodwill and Acquired Intangible Assets:
We do not amortize goodwill and indefinite-lived intangible assets, but test these assets for impairment at least annually or whenever conditions indicate ...
AVX Corporation's Accounting Choice are examined.