MILESTONE THREE2Depreciation MethodStraight-line depreciation is the standard method across the retail market, which Wal-Mart also uses. Wahlen, Jones & Pagach (2017), define straight-line depreciation as an allocationof an assets depreciated values over the useable life of the product. The retail sector uses thismethod generally because of its ease of use, not requiring complex calculations in most cases,and is helpful to determine when an item should go on sale and for how much when trying toreduce or dispose of old inventory.Adjusting EntryAdjusting Entries are, simply put, an adjustment to an account or accounts. The purposeof this portion of a financial report is to make the accrual basis of a company’s accountingunderstandable in a financial statement. One of the accounts that Wal-Mart uses for adjustingentries for is prepaid expenses (Averkamp, n.d.). In the 2019 report, Wal-Mart reported over $44Million in restricted cash and assets that were held for sale as part of their prepaid expenseswhich works well for Wal-Mart since they make major purchases throughout the year to be sold(2020 Annual Report, 2020).Communication MemoTo: C. Douglas McMillon, Chief Executive OfficerFrom: Robert Avery,Date: January 24th, 2021RE: GAAP to IFRS Transition
