Accounting Homework

The second 6 weeks of our course have covered the following 3 topics:

• Post-Retirement Benefits

• XBRL

• Financial Statement Disclosures

You will have 2 questions, one about the last 3 topics, and one about all the topics. Here they are, good luck! ☺

1. EMC 2008 10-K (Annual Report) (no more than 4 pages for a response) Use this link to view EMC’s 2008 Financial Statements. Go to Part II ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

https://www.sec.gov/Archives/edgar/data/790070/000104746909002025/0001047469-09-002025-index.htm

Read sections F. Investments and Fair Value pages 74-77 and I. Retirement Plans and Medical Benefits pages 82-top of 86 (you don’t need to read medical and life insurance plans). Answer the following questions with your knowledge about financial statement disclosures, post-retirement benefits and XBRL (and well, a little of Fair Value!!).

• a. Describe the impact that implementing FAS 157 had on EMC’s financial statements, based on the footnote information provided. Can you tell if the current economic conditions influenced the valuation of their financial assets and liabilities from this disclosure? If yes, what information told you this, if not, what

information do you feel is missing? As an investor, would this disclosure give you enough information to be satisfied that this is a truly fair valuation? Why or why not?

• b. From the disclosures and computations for the pension plans that EMC has responsibility for (primarily from the previous acquisition of Data General-current EMC employees are covered by a 401k plan), what impacts did the economic situation have in the plan from 2007 to 2008? Be specific. Do you think they should convert to a Cash Balance Plan? Why do you think they have not done this, when many other major companies have? (you can do other research for this outside the footnote if it helps)

• c. If these 2 sections were tagged with XBRL, and you had access to software that could use XBRL data, would you be able to answer questions A and B faster and more thoroughly? Or is good old- fashioned reading and analysis just as effective in this case?

2. How will the knowledge gained from the 6 topics we have studied this semester benefit your career and personal investing lives? (no more than 1 page for a response)

Instructions and guidelines for writing your paper . This is an exercise to demonstrate your understanding of the topics and the implications of the most recent or pending changes on businesses and users of the financial statements. The point of this paper will be to communicate your understanding of the topics and their impact, in a business writing style. The clarity of your thought and arguments should be able to inform and persuade the reader about the topics. Requirements: 1. The recommended format would be to follow the MLA standard for writing your paper. Proper citations are required. The link to the MLA website is https://owl.english.purdue.edu/owl/resource/747/01/.

Most colleges and Universities use this