ACCT 212 Week 6 Discussion: Exploring the Importance of Balance Sheets in Financial Reporting and Analysis

ACCT 212 Week 6 Discussion: Balance Sheet WEEK 6: NONCURRENT ASSETS AND RELATED LIABILITIES Class, access the balance sheet of a publicly traded company, and list what items of assets are reported i n the property, plant, and equipment section on the asset side. Select any one item from the property, plant, and equipment section, and discuss how you determine the cost of that item to be reported on the balance sheet. Assets are considered as the resources of the articles which are used in the day to day operations, in order to generate profit and also to provide a future benefit to the company. Assets may be short- term as well as long-term and there are two types of assets included under long-term assets which are tangible and non-tangible. Tangible assets are considered as the plant assets or property, plant, and equipment assets and are also termed as fixed assets and these assets remain available in the business and used in the manufacturing process. Assets included under the section of property, plant, and equipment are displayed below: a) Land b) Building c) Machinery d) Equipment e) Furniture f) Vehicles g) Fixtures h) Leasehold i) Land improvement etc. I selected Starbucks's for the balance sheet assignment. Starbucks fiscal year ends October 1st. The assets are listed from the most liquid to the least. Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.Equipment and land are grouped together in PP&E (property, plant, and equipment). The liability section is broken up into current and non-current liabilities. The current liabilities are listed first. In the equity section loss or gains from accumulated other comprehensive income is listed. Also, non-controlling interest is listed separately in the equity section. The balance sheet provides creditors, investors, and analysts with information on company’s resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company’s assets as well as an indication of cash flows that may come from receivables and inventories. Assets are resources controlled by the company and as a result of past events and from which future economic benefits are expected to flow to the entity. Starbucks Corp.’s property, plant and equipment, net increased from 2018 to 2019 but then slightly decreased from 2019 to 2020. Equity investments 478,700 396,000 334,700 481,600 354,500 352,000 Property, plant and equipment, net 6,241,400 6,431,700 5,929,100 4,919,500 4,533,800 4,088,300 Operating lease, right-of-use asset 8,134,100 — — — — — Deferred income taxes, net 1,789,900 1,765,800 134,700 795,400 885,400 828,900 Other long-term assets 568,600 479,600 412,200 362,800 417,700 415,900 Other intangible assets 552,100 781,800 1,042,200 441,400 516,300 520,400 Goodwill 3,597,200 3,490,800 3,541,600 1,539,200 1,719,600 1,575,400 Long-term assets 21,568,100 13,565,700 11,662,200 9,082,200 9,569,000 Starbucks's Balance sheet was relatively easy to read compared to others. Here is the link to their annual report. References Spiceland, David j., Thomas, Wayne, Hermann, Don. (2019). Financial Accounting 5th Edition. New York City: McGraw Hil