Read and review the selected case study from the required text, and answer the analysis questions. After reviewing the background section of the Swisscom AG?in your textbook, provide

Read and review the selected case study from the required text, and answer the analysis questions.

After reviewing the background section of the Swisscom AG in your textbook, provide answers to the following questions:

1. Use the information in Note 27 to restate Swisscom’s consolidated financial statements in accordance with U.S. GAAP. Begin by constructing debit/credit entries for each reconciliation item, and then post these entries to columns 2 and 3 using the worksheets provided in the textbook. 

2. Calculate each of the following ratios under both IFRS and U.S. GAAP, and determine the percentage differences between them, using IFRS ratios as the base:

  • Net income / Net revenues
  • Operating income / Net revenues
  • Operating income / Total assets
  • Net income / Total shareholders’ equity
  • Operating income / Total shareholders’ equity
  • Current assets / Current liabilities
  • Total liabilities / Total shareholders’ equity 

3. Which of these ratios is most (least) affected by the accounting standards used?

From: Doupnik, T., & Perera, H. (2014). International accounting (4th ed.) (pp. 535–536). New York, NY: McGraw-Hill Education.

Sheet1

Courtney Hofland
6/25/21
Case Study 10-1
Swisscom AG
Name of Acct. Debit Credit
A. Prop. Plant & Equip. 54
Dep. & Amortization 5
Interest Expense 13
Retained Earnings 46
B. Prop. Plant & Equip. 107
Other Long-term Liabilities 98
Restructuring Charges 205
C. Dep. & Amortization 5
Prop. Plant & Equip. 5
D. Other None-Current Assets 475
Dep. & Amortization 188
Goods and Services Purch. 370
Retained Earnings 293
E. Investments 50
Equity of Net Loss/ Affiliate 50
TOTAL 982 982
Restating Swisscom's Financial Statements From IFRS to U.S. GAAP
IFRS Debit Credit U.S. GAAP
Consolidated Statement of Operations
Net Revenues 9,842 9,842
Capitalized Costs and Changes in Inv. 277 277
TOTAL 10,119 10,119
Goods and Services Purchased 1,666 370 1,296
Personnel Expenses 2,584 2,584
Other Operating Expenses 2,090 2,090
Depreciation & Amortization 1,739 5 1,937
5
188
Restructuring Charges 1,726 205 1,521
Total Operating Expenses 9,805 9,428
IFRS Debit Credit U.S. GAAP
Operating Income 314 691
Interest Expense -428 13 -415
Financial Income 25 25
Income (Loss) Before Income Taxes -89 301
and Equity in Net Loss of Affiliated
Companies
Income Tax Expense 1 1
Income (Loss) Before Equity in Net -90 300
Loss of Affiliated Company
Equity in Net Loss of Affiliated Comp. -325 50 -275
Net Income (Loss) -415 25
IFRS Debit Credit U.S. GAAP
Consolidated Retained Earnings
Statement
Trade Accounts Receivable 2,052 2,052
Inventories 169 169
Other Current Assets 34 34
Total Current Assets 2,255 2,255
Non-Current Assets
Property, Plant, and Equipment 11,453 54 11,609
107
5
Investments 1238 50 1288
Other Non-Current Assets 220 475 695
Total Non-Current Assets 12,911 13,592
Total Assets 15,166 15,847
IFRS Debit Credit U.S. GAAP
Liabilities and Shareholder's Equity
Statement
Current Liabilities
Short-Term Debt 1178 1178
Trade Accounts Payable 889 889
Accrued Pension Costs 789 789
Other Current Liabilities 2213 2213
Total Current Liabilities 5069 5069
Long-Term Liabilities
Long-Term Debt 6200 6200
Finance Lease Obligation 439 439
Accrued Pension Costs 1488 1488
Accrued Liabilities 709 709
Other Long-Term Liabilities 338 98 240
Total Long-Term Liabilities 9174 9076
Total Liabilities 14243 14145
Shareholder's Equity
Retained Earnings 1352 2131
Unrealized Market Value Adj. on Sec. 39 39
Available for Sale
Cumulative Translation Adjustment -161 -161
Total Shareholder's Equity 1230 2009
Total Liabilities and Shareholder's 15473 794 794 16154
Equity
Ratios IFRS U.S. GAAP Difference
1. Net Income/ Net Revenues -4.22% 0.25% -105.92417061611400%
2. Operating Income/ Net Revenues 3.19% 7.02% 120.06269592476500% Most Affected
3. Operating Income/ Total Assets 2.03% 4.28% 110.83743842364500%
4. Net Income/ Total Shareholder's Equity -33.74% 1.24% -103.67516301126300%
5. Operating Income/ Total Shareholder's Equity 25.53% 34.40% 34.743439091265200%
6. Current Assets/ Current Liabilities 51.00% 0.51% -99.00% Least Affected
7. Total Liabilities/ Total Shareholder's Equity 11.58% 7.04% -39.205526770293600%
Differences=(U.S. GAAP-IFRS)/IFRS
Through these figures we can conclude Current Assets/ Current liabilities being the least affected by specified accounting standards in reference to documentation and Operating Income/ Net Revenues affected most by specified accounting standards.

Collepals.com Plagiarism Free Papers

Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.

Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS

Why Hire Collepals.com writers to do your paper?

Quality- We are experienced and have access to ample research materials.

We write plagiarism Free Content

Confidential- We never share or sell your personal information to third parties.

Support-Chat with us today! We are always waiting to answer all your questions.

Related Posts

All Rights Reserved Terms and Conditions
College pals.com Privacy Policy 2010-2018