In addition to reputational impacts, penalties could include ongoing audit requirements and significant legal liability. The Company is subject to federal, state and international laws relating to the collection, use, retention, security and transfer of PII. In many cases, these laws apply not only to third-party transactions, but also may restrict transfers of PII among the Company and its international subsidiaries. Several jurisdictions have passed laws in this area, and other jurisdictions are considering imposing additional restrictions. These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction.
Your bookkeeping team imports bank statements, categorizes transactions, and prepares financial statements every month. Other than reporting your accounting year on your Employer ID application, you don’t have to report your fiscal year to the IRS. The IRS says, “Unless you have a required tax year , you adopt a tax year by filing your first income tax return using that tax year.” Every business has afiscal year.A company’s fiscal year is its financial year; it is any 12-month period that the company uses for accounting purposes. A fiscal year-end is usually the end of any quarter, such as March 31, June 30, September 30, or December 31. The adjusted trial balance is prepared after the adjusting entries have been journalized and posted.
When preparing financial statements an adjusted trial balance is easier to work with than the entire ledger E. Disclosure of accounting policy for trade and other accounts receivable, and finance, loan and lease receivables, including those classified as held for investment and held for sale. Disclosure of accounting policy for recognition of costs in the period which correspond to the sales and revenue categories presented in the statement of operations. The accounting policy may include the amount and nature of costs incurred, provisions associated with inventories, purchase discounts, freight and other costs included in cost of sales incurred and recorded in the period. This disclosure also includes the nature of costs of sales incurred and recorded in the statement of operations for the period relating to transactions with related parties. The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized in earnings in the current period. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions.
Under the program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act. The Company distributes its products through third-party cellular network carriers, wholesalers, retailers and value-added resellers. The Company also sells its products directly to small and mid-sized businesses and education, enterprise and government customers.
Each share issued with respect to RSUs granted under the 2014 Plan reduces the number of shares available for grant under the plan by two shares. RSUs canceled and shares withheld to satisfy tax withholding obligations increase the number of shares available for grant under the 2014 Plan utilizing a factor of two times the number of RSUs canceled or shares withheld. Currently, all RSUs granted under the 2014 Plan have dividend equivalent rights (“DERs”), which entitle holders of RSUs to the same dividend value per share as holders of common stock. DERs are subject to the same vesting and other terms and conditions as the corresponding unvested RSUs.
The Fiscal Year Cycle
Capitalized software is included in other assets on the Consolidated Balance Sheets. The lease term, which includes all renewal periods that are considered to be reasonably assured, begins on the date the Company has access to the leased property. The Company receives contributions from landlords to fund buildings and leasehold improvements. Such contributions are recorded as deferred rent and amortized as reductions to lease expense over the lease term.
The U.S. Internal Revenue Service (the “IRS”) concluded its review of the years 2010 through 2012 during the third quarter of 2017. As of September 30, 2017, the total amount of gross unrecognized tax benefits was $8.4 billion, of which $2.5 billion, if recognized, would affect the Company’s effective tax rate. As of September 24, 2016, the total amount of gross unrecognized tax benefits was $7.7 billion, of which $2.8 billion, if recognized, would have affected the Company’s effective tax rate. Under master netting arrangements with the respective counterparties to the Company’s derivative contracts, the Company is allowed to net settle transactions with a single net amount payable by one party to the other. The fair value of derivative liabilities is measured using Level 2 fair value inputs and is recorded as accrued expenses and other non-current liabilities in the Consolidated Balance Sheets. The fair value of derivative assets is measured using Level 2 fair value inputs and is recorded as other current assets and other non-current assets in the Consolidated Balance Sheets. In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value.
In May 2017, the Company entered into an accelerated share repurchase arrangement (“ASR”) to purchase up to $3.0 billion of the Company’s common stock. In August 2017, the purchase period for this ASR ended and an additional 4.5 million shares were delivered and retired. In total, 20.1 million shares were delivered under this ASR at an average repurchase price of $149.20. In May 2017, the Company’s Board of Directors increased the Company’s share repurchase authorization from $175 billion to $210 billion of the Company’s common stock, of which $166 billion had been utilized as of September 30, 2017. The remaining $44 billion in the table represents the amount available to repurchase shares under the authorized repurchase program as of September 30, 2017.
Strong branding ultimately pays off in customer loyalty, competitive edge, and bankable brand equity. All legitimate business benefits belong in your business case or cost/benefit study. Find here the core principles and proven process for measuring and valuing all business benefits—financial, a company’s fiscal year must correspond with the calendar year. nonfinancial, and “intangible.” The budgetary process, in other words, relies on individuals with detailed first-hand knowledge of the organization’s operations and operating environment. A line of text in each statement header identifies the fiscal year or fiscal quarter in view.
Ownership equity may include both tangibles and intangibles, such as intellectual property or goodwill. Anything tangible or intangible that can be owned to produce positive economic value is considered an asset. This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each adjusting entries person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein. Since many businesses use the standard December 31st year end, accounting itself is a seasonal business.
The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company accrues for estimated purchase commitment Certified Public Accountant cancellation fees related to inventory orders that have been canceled or are expected to be canceled. Manufacturing purchase obligations typically cover the Company’s forecasted component and manufacturing requirements for periods up to 150 days. On August 30, 2016, the European Commission announced its decision that Ireland granted state aid to the Company by providing tax opinions in 1991 and 2007 concerning the tax allocation of profits of the Irish branches of two subsidiaries of the Company (the “State Aid Decision”). The State Aid Decision orders Ireland to calculate and recover additional taxes from the Company for the period June 2003 through December 2014.
These involve managing the relationship between a firm’s short-term assets and its short-term liabilities. The goal of working capital management is to ensure that the firm is able to continue its operations and that Certified Public Accountant it has sufficient cash flow to satisfy both maturing short-term debt and upcoming operational expenses. The management of working capital involves managing inventories, accounts receivable and payable, and cash.
Accounting For Subsequent Events
The Company’s online services may from time to time experience outages, service slowdowns or errors. Defects may also occur in components and products the Company purchases from third parties.
For example, if a service contract is paid quarterly in advance, at the end of the first month of the period two months remain as a deferred expense. In the deferred expense, the early payment is accompanied by a related, recognized expense in the subsequent accounting period, and the same amount is deducted from the prepayment.
IWork is the Company’s integrated productivity suite included with all Mac computers and is designed to help users create, present and publish documents through Pages®, presentations through Keynote® and spreadsheets through Numbers®. The Company also has Multi-Touch™ versions of iWork applications designed specifically for use on iOS devices, which are available as free downloads for all new iOS devices. Portions of the Registrant’s definitive proxy statement relating to its 2018 annual meeting of shareholders (the “2018 Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.
- In another example, the State of Texas has designated a fiscal year that extends from September 1, 2000, through August 31, 2001.
- The quick ratio, which is calculated by deducting inventories and prepayments from current assets and then dividing by current liabilities–this gives a measure of the ability to meet current liabilities from assets that can be readily sold.
- Based on the Company’s assessment, management has concluded that its internal control over financial reporting was effective as of September 30, 2017 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.
- Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements.
- The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments.
74) Revenue accounts are temporary accounts that should begin each accounting period with zero balances. 65) Financial statements can be prepared directly from the information in the adjusted trial balance. 27) Adjustments are necessary to bring an asset or liability account to its proper amount and also update a related expense or revenue account. 8) Adjusting entries are necessary so that asset, liability, revenue, and expense account balances are correctly reported. 5) Adjusting entries are made after the preparation of financial statements. 2) The time period assumption assumes that an organization’s activities can be divided into specific time periods such as months, quarters, or years.
The Company is subject to laws and regulations affecting its domestic and international operations in a number of areas. The Company sells complex hardware and software products and services that can contain design and manufacturing defects. Sophisticated operating system software and applications, such as those sold by the Company, often contain “bugs” that can unexpectedly interfere with the software’s intended operation.
What Is The Difference Between A Fiscal Year And A Tax Year?
109) A work sheet contains all of the balances for each account and therefore may be used as a substitute for the set of financial statements. 103) Trekker Bikes’ current assets are $300 million and its current liabilities are $125 million. 102) The current ratio is computed by dividing current liabilities by current assets. 80) Closing entries are required at the end of each accounting period to close all ledger accounts.
“fiscal” Time Units Can Vary Slightly In Length
Finally, for companies with inventory, planning the year-end for a Saturday makes it much easier to conduct the year end inventory count without disrupting normal operations. For example, taxpayers who become part of a group which files a consolidated return must adopt the taxable year of the parent corporation. Thus, a company which has been recently acquired by or merged with another may be required to change its year-end. The key reason for companies choosing different fiscal year-ends is the seasonal fluctuations of the businesses they operate and the availability of supplies. In addition, companies that depend on U.S. government contracts might choose a September 30 year-end to coincide with the federal government’s year end. The federal government’s fiscal year begins on Oct. 1 and ends on Sept. 30. Some companies opt to follow a fiscal year instead of a calendar year because their fiscal year better fits their natural business cycles.
Management obtains any information it wants about the company’s operations by requesting special-purpose reports. It uses this information to make difficult decisions, such as which employees to lay off and when to expand operations. Assets represent things of value that a company owns and has in its possession, or something that will be received and can be measured objectively. They are also called the resources of the business, some examples of assets include receivables, equipment, property and inventory. Assets have value because a business can use or exchange them to produce the services or products of the business.
You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. It is acceptable to record prepayment of expenses as debits to expense accounts. Failure to record depreciation expense will overstate the asset and understate the expense.
The Fiscal Year In Financial Accounting
The strength in foreign currencies relative to the U.S. dollar had a favorable impact on Rest of Asia Pacific net sales during 2017 compared to 2016. Greater China net sales decreased during 2016 compared to 2015 due primarily to lower net sales of iPhone and the effect of weakness in foreign currencies relative to the U.S. dollar. Greater China net sales decreased during 2017 compared to 2016 due primarily to lower net sales of iPhone, partially offset by higher net sales of Services. The weakness in foreign currencies relative to the U.S. dollar had an unfavorable impact on Greater China net sales during 2017 compared to 2016. Europe net sales decreased during 2016 compared to 2015 driven primarily by the effect of weakness in foreign currencies relative to the U.S. dollar and a decrease in net sales of Mac, largely offset by an increase in iPhone unit sales and Services. Europe net sales increased during 2017 compared to 2016 due primarily to higher net sales of iPhone and Services.
Debit Supplies $800 And Credit Supplies Expense $800
Depending on the firm’s line of business, the operating cycle may cover days, weeks, months, or longer. B. Accrued expenses and accrued revenues involve assets and liabilities that had not previously been recorded.