Assignment 4 Luyao Wang

Assignment 4 Luyao Wang - Luyao Wang A39824471 Assignment...

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Luyao Wang A39824471 Assignment #4 Corporate Earnings: Who Can You Trust? Read the attached article from Business Week, and answer the following questions. We will discuss it in class as well. 1. Often, companies that are facing restructuring activities have taken very large “one time” charges that involve projects that will be paid for over a period of years rather than assigning the cost of those projects as expenses as they are incurred. What is wrong with this approach and why do companies continue to do this? Might it involve an ethical dilemma? Write-offs are increasingly distorting corporate earnings--so much so, in fact, that some question whether the underlying meaning of profit numbers and their value as a true reflection of corporate performance is getting trampled. The earnings number is supposed to represent: an accurate snapshot of how well a company's operations performed in a given year. And one of the basic principles of accounting is that both revenues and costs should be matched to the year in which
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This note was uploaded on 09/10/2010 for the course IAH 001 taught by Professor Wang during the Spring '10 term at Michigan State University.

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Assignment 4 Luyao Wang - Luyao Wang A39824471 Assignment...

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