Cashback Offer from 15th to 20th April 2021. Get Flat 20% Cashback credited to your account for a minimum transaction of $80. Post Your Question Today!

Question DetailsNormal
$ 15.00

What are the factors that likely explain the difference between Microsoft’s market

Question posted by
Online Tutor Profile
request

a.What are the factors that likely explain the difference between Microsoft’s market value of equity and its reported book value of equity?

b.What effect did Microsoft’s software capitalization policy have on its financial statements? Ignore any potential tax effects.
I.Assume that 60% of Microsoft’s research and development expenses were incurred after technological feasibility was established, that the average product life was two years, and that the company begins amortizing software costs at the beginning of the following year. Estimate the effect of capitalizing software costs on Microsoft’s fiscal 1997, 1998, and 1999 income statements and balance sheets.
II.Speculate as to why Microsoft chose to expense all software costs as incurred rather than capitalizing a portion of these costs.
       
c.What effect did Microsoft’s revenue recognition policy have on its financial statements? Ignore any potential tax effects.
I.Estimate the amount of revenue that Microsoft would have been reported in each quarter from 1996 through 1999 if Microsoft had not adopted its new revenue recognition policy in 1996.
II.Speculate as to why Microsoft decided to defer a portion of its revenues in fiscal 1996.

d.What was the overall impact of these two policies on Microsoft’s fiscal 1997, 1998, 1999 financial statements?

e.In your opinion, did Microsoft provide its analysts’ with information that was intentionally overly pessimistic? Are there any benefits to the company to being outwardly pessimistic about its future prospects?

f.Describe Microsoft’s overall financial reporting strategy. Why had the company adopted this strategy and why was the SEC concerned about it?
 

Available Answer
$ 15.00

[Solved] What are the factors that likely explain the difference between Microsoft’s market

  • This Solution has been Purchased 4 time
  • Submitted On 24 Dec, 2014 08:58:32
Answer posted by
Online Tutor Profile
solution

The market value of equity of Microsoft as on June 30, 1999 was $460 billion against reported book value of equity of $28.4 billion.  Microsoft has been following very conservative accounting policies, in particular in the areas of accounting of software development costs and revenue recognition.  Microsoft has been, during the period 1986 when the company went public through 1999, ...

Buy now to view the complete solution
Other Similar Questions
User Profile
NUMBE...

Week 5 DQ 1 need help

What is correlation? What are the different types of correlation?...
User Profile
NUMBE...

Week 2 2. What are degrees of freedom? How are the calculated?

Inferential Statistics 2. What are degrees of freedom? How are they calculated? Answer: The degree of freedoms is equal to the number of independent observation or the number of subjects in the data, minus the parameters est...
User Profile
Beam7...

What are the potential risks of a single large comprehensive experiment

Please see attached Thank you!.........................
User Profile
Tutor...

What are the connection between quality assurance, manufacturing, and management practices in Six

⭐⭐⭐⭐⭐ Week 4: Six Sigma Quality • What are the connection between quality assurance, manufacturing, and management practices in Six Sigma? Six Sigma refers to a quality improvement philosophy and methods comp...
User Profile
Assig...

POL 230 What are the Benefits and Dangers of Private Security Companies(USE AS A GUIDE ONLY)

Your assignment is attached..Thanks for purchasing my this assignment!...

The benefits of buying study notes from CourseMerit

homeworkhelptime
Assurance Of Timely Delivery
We value your patience, and to ensure you always receive your homework help within the promised time, our dedicated team of tutors begins their work as soon as the request arrives.
tutoring
Best Price In The Market
All the services that are available on our page cost only a nominal amount of money. In fact, the prices are lower than the industry standards. You can always expect value for money from us.
tutorsupport
Uninterrupted 24/7 Support
Our customer support wing remains online 24x7 to provide you seamless assistance. Also, when you post a query or a request here, you can expect an immediate response from our side.
closebutton

$ 629.35