View Homework Help – Harnischferger Case from ACG at Florida International University. Harnischfeger Corporation 1. Describe clearly the accounting. Agenda Case Facts Strategy Analysis Accounting Analysis. Directions Read the “Harnischfeger Corp” case study and answer the following questions. Submit your completed assignment no later than the last day of Week .

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The liquidation means selling of older inventory since the current sales are higher then current purchases then the liquidation will occur and as result any inventory not sold in previous periods must be liquidated.

Are these changes likely to affect future profits? See Exhibit 4, Notes 6 and 9, in the case. How to Write a Summary of an Article? The financial management of the company also seems to be sound. In my opinion, the changed accounting format highlights the effectiveness of our strategy better than the old policies do.

As a company you have to put the best foot forward if you want to raise capital, convince customers that you are a viable company, and attract talented people to work for the company. The company corppration a new plan, which goal was an improvement in the minimum pension benefit.

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The corresponding percentage in was Then clearly we are better off following the more liberal policies than conservative policies. How much did the pre-tax income increase as a result of the changed ratio in ? We corporaton to tell the truth but do not want to be overly conservative in doing so. Harnischfeger Case Group Members: Basically the mission to satisfy shareholders and business related entities such as banks and suppliers was accomplished by showing the ability to overcome financial problems through management based on the financial statements.


Goessel was appointed as the chairman and CEO of the company, and Mr. Change in employee pension plans. The company considered cor;oration offer inadequate and rejected it.

Without additional research, it is difficult to make conclusive statements on this issue. Feedback Privacy Policy Feedback. How will this change affect future reported profits? How to Write a Good Case Study.

In the pension expenses accounted for 1. Under the new method, these costs are capitalized and amortized over their estimated useful lives. Harnischfeger incorporated products purchased from Kobe Steel, which were re-sold by the company, into its net sales.

Teerachai Supojchalermkwan Krisna Soonsawad Chapter If you wish to download it, please recommend it to your friends in any social system. My own belief is that people adjust for the obvious things like one-time gains and losses but have difficulty in adjusting for ongoing differences. This change should report higher profits in the coming years.

How to Write a Critical Analysis.

We will write a custom essay sample on Harnischfeger Corporation specifically for you. To get a unique essay Hire Writer. Inan studg of 6. Avoid the violation of debt covenant restrictions, and 4. Accelerated depreciation makes cost appear too high. What is the effect of the depreciation accounting method change on the reported income in ?

In fact, the company was negotiating long-term contracts in with the governments of Turkey and China. We think you have liked this presentation.

Harnischfeger Corporation

Therefore, the accounting changes helped the management report a significant profit rather than a modest loss. Even if capital markets see through the effects of accounting changes, managers may believe otherwise in making accounting decisions. We use cookies to give you the best experience possible. The company used the same set of accounting rules for external reporting and for internal management accounting.


The instructor should challenge the students by asking: From one corpporation that decision could help the company to rebuild the trust of customers and suppliers for continuing in business. If people adjust for the differences in accounting policies when they compare us with other companies, then it should not matter whether we follow conservative or liberal policies.

Now we have decided to change this.

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Change in the allowance for doubtful accounts. I am not sure whether people make the adjustments or not, but either way we wish to present an optimistic version of the picture and let people figure out what to do with the numbers.

This provides an incentive for the managers to boost profits through accounting changes. The instructor can sum up the class discussion on question 2 by mentioning the views of the management described above. The instructor should ask the class to identify the latter-type decisions among the above. For stock prices to reflect reality in an unbiased manner, it is not necessary that everyone in the market has to process the information correctly.

When the outside world compares our financial performance with that of other companies, they may or may not take the time and effort to untangle the effects of the differences in financial policies that various companies follow. Also, the company continued to liberalize its financial reporting policies.