Premium Essay

Deloitte Case 12-1

In: Business and Management

Submitted By cmc81
Words 396
Pages 2
Case Study 12-1: An Unlikely Alliance

Florabama is a power producer of which Meyer Inc. is a 60% owner and Saban Company is a 40% owner. Saban has a cost-plus arrangement that permits it to purchase up to 20% of the power produced by Florabama at the cost plus a fee. The remaining power produced by Florabama is sold to third parties. The profits and losses of Florabama are split based on ownership. Sale, transfer, or disposition of ownership requires written consent of the other party in advance. Both parties are independent and willingly agreed upon the prior approval terms. The board is composed of 10 individuals that Meyer and Saban are able to appoint based on their ownership percentage (Meyer has 6 and Saban has 4). The board makes all strategic decisions and establishes operating and capital budgets. The board also determines the pricing of power produced and appoints the CEO. The CEO that was appointed was the COO of Saban and he will oversee the day to day operations of Florabama. Both Meyer and Saban bear equity price risk. Meyer Inc. also has operating risk since the decisions of the board are made by simple majority (Meyer owns the majority). Saban bears commodity price risk due to the cost-plus arrangement.

Meyer and Saban are both variable interest holders. Saban has an equity interest in Florabama and it also has the cost-plus arrangement, both of which make Saban a variable interest holder. Meyer Inc. is a variable interest holder in Florabama due to the equity interest they hold.

ASC 810-10-25-38 says that the reporting entity that consolidates a Variable Interest Entity (VIE) is called the primary beneficiary of the VIE. It also states that a reporting entity shall be deemed to have a controlling financial interest in a VIE if it has both of the following characteristics: 1. The power to direct the activities of a VIE that most…...

Similar Documents

Premium Essay

Checkpoint - Deloitte & Touche Case Study

...Checkpoint: Deloitte & Touche A Case Study HRM/240 November 30, 2011 Checkpoint: Deloitte Touche Case Study 1. How did the problems at Deloitte & Touche occur in the first place? The problems at Deloitte & Touche first occurred when women who should have been considered for partnership instead of advancing forward moved off the work scene for several reasons. There were at least 80 percent of the women, although qualified resigned before ever becoming a partner because she believed there was neither an opportunity for advancement for a woman in a male dominated company, nor was she included in a mentoring and networking program that rarely was beneficial for them anyway. The women also thought that work and concerns in dealing with family matters proved to be problematic. According to Molina (2005), “The long hours and heavy travel schedules for some made juggling work and home life next to impossible” (p.1). 2. Did their changes fix the underlying problems? Explain. The changes made created a huge difference in the way the women of this company were treated and the way they perceived it to be. According to Trimberger (1998), “Deloitte & Touche has worked at changing its culture since launching the program in 1993; however, not all of the desired changes have been made, nor all of......

Words: 647 - Pages: 3

Premium Essay

Case 12-02 de

...Case 12-02 To Recognize or Not to Recognize, That Is the Question Shakespeare Inc. (“Shakespeare” or the “Company”) is a privately held book printing and publishing company with a December 31 year-end. The summary balance sheet as of December 31, 2010, included: Current assets Noncurrent assets Total assets Current liabilities Noncurrent liabilities Total liabilities Total shareholder equity $ 6,500,000 28,250,000 $34,750,000 $ 4,500,000 13,750,000 $18,250,000 $16,500,000 The summary results of operations for the year ended December 31, 2010, included revenue of $10.7 million and net income of $1.2 million. Shakespeare is planning to issue its financial statements on March 20, 2011. On March 18, 2011, Shakespeare’s management will evaluate new information about one of its accruals and two subsequent events to determine if this information or events represent items that should be recognized or disclosed in the December 31, 2010, financial statements. Medical Benefits Payable For the past several years, Shakespeare has self-insured medical benefits (health and dental) for its employees. The Company records the costs of medical care in the period in which covered events occur and includes its best estimate of the costs that have been incurred but not yet reported (IBNR) in its estimate of the medical benefits payable. Shakespeare looks to the FASB Accounting Standards Codification, which defines IBNR as “losses incurred by the insured entity that have not yet been reported to...

Words: 967 - Pages: 4

Premium Essay

Trueblood Case 12-5

...TrueBlood Case 12-5 LabCo is a large construction contracting firm involved in the manufacturing of equipment that is used by other companies to manufacture parts and components for planes, jets and other machines and equipment of the air. Each machine produced by LabCo is tailored made to suit each of its many industry customers. As previously stated LabCo uses a variety of contracts primarily percentage-of-completion based, however, is that the correct approach to take? In addition the firm has recently entered into a fixed price contract with a high level of detail and heavily involved performance specification with Halibut, LabCo intends to use the percentage-of-completion method with this contract. When the contract was accepted and commencement began a great deal of difficulties arose that increased the expenses that LabCo had estimated and pushed back the completion date. With all of the difficulties that LabCo has faced the question should it use another method to account for the contract and if so what method should they use? The purpose of this report is to answer the two previously stated questions which are, under IFRS how should LabCo account for its construction contracts in general and what method should they use in regards to their newest contract with Halibut in the face of numerous complications. Normally special order equipment could include numerous costs that the firm would be unaware of until they arose. In regards to LabCo though, their......

Words: 830 - Pages: 4

Premium Essay

Case 12

...Bally Total Fitness Case 1 2011 Fall Comm 400 Health Club Industry Bally Total Fitness was a leading firm in the health club industry. Since market competition had intensified, Bally’s stock price dropped leading to an investigation by the Security and Exchange Commission. To improve Bally’s current position, we apply the Porter’s Five Forces Model to analyze its external environment. The competitive rivalry in health club industry is intense as there are many small or equally sized competitors. In addition, exit barriers are high because of higher capital costs and operation costs, indicating that the health club industry is hard to exit. Equipment makers are the industry’s major suppliers. Suppliers have high bargaining power because there are only a small number of well-known suppliers. Consumers are the buyers and have moderate bargaining power when choosing a health club, because there are numerous clubs in the industry. But once they are committed to memberships, they have a lower bargaining power. The threat of substitute products is high. Consumers can workout at home, outdoors, or at gyms within their workplaces. Besides, they can go to health spas designed for workouts. Nutritional and athletic products are complimentary to the health club industry. The threat of new entrants is rather low because it is difficult to acquire decent real estate or a good location; also, exercise equipments are highly valued. Consumers who have had a good experience with......

Words: 665 - Pages: 3

Free Essay

Deloitte Case

...clients will help the consulting team better understanding the environment and the situation. Second, Maria should educate the client that even though she does not have the relevant experience in automotive manufacturing, her team does have a senior consultant, who had prior experience in the field and had been on three different engagements. Moreover, Maria should mention their team would use the larger resource from Deloitte to serve the client and provide the best suitable solution for SKS. Finally, Maria should point-out that her team’s goal is to help the foreman and SKS to achieve their goals. By aligning their goals, the Foreman will recognize he is also part of the consulting team and solidify their trust. Here is a script I come up for Maria Chen. “I recognize the fact that I do not have the hands-on experience like you do on the shop floor, and I will take any information and advice you give us into our project consideration. In addition, my team does have professionals with relevant experiences in the manufacturing industry and more resources from Deloitte Consulting Group ready to support the project. With our training and experiences, my team will have a big picture analysis and provide you and the rest of SKS a “re-engineered” production process that will allow your job to be better accomplished and reduce inventory cost at the same time....

Words: 259 - Pages: 2

Premium Essay

Deloitte Aaer-3428 Case Analysis

...Deloitte AAER-3428 Case Analysis AAER No. 3428 is a report of an enforcement action against Deloitte & Touche (South Africa) in regards to violations of auditor independence and improper professional conduct. Certain names were not disclosed in this case and will be referred to as “Director” and “Company A.” The key players involved in this case are Deloitte & Touche South Africa (“DT-SA”), their wholly owned consulting affiliate Deloitte Consulting (Pty) Ltd. (“DC-SA”), DC-SA’s contracted consultant (“Director”) and DT-SA’s auditing client (“Company A”). In April, 2006, Director was hired by DC-SA as an independent consultant to provide assistance in the energy industry. There were no business conflicts until September 1st, 2007, when Director joined the board of directors of Company A. Because DC-SA is owned by DT-SA, Director’s employment with DC-SA became a prohibited business relationship that impaired auditor independence between DT-SA and their client, Company A. Because of an absence of controls in place for DC-SA, DT-SA was unaware of this prohibited relationship until August 11, 2008. After further review, Director’s employment was effectively terminated on September 30, 2008. DT-SA’s lack of internal controls and continued employment of Director for over a year caused them to violate auditor independence and engage in improper professional conduct. The particular rules that were violated in this case were rules 210.2-01 and 210.2-02(b) of Regulation...

Words: 865 - Pages: 4

Premium Essay

Case 12-5

... * Small loan portfolio (2 billion loans) the rest will be with debt equity. * Assets less non debt liabilities is how GE views * Small platform but very detailed and demanding on how they manage specific deals. CRE: Commercial Real Estate: * 50/50 debt and equity; flow business and discrete business * 2007 they wanted to sell equity book and unfortunately it couldn’t be completed * Equity assets are more risky they are required to gain revenue or bad. * 1600 loans (debt) real estate assets; 1400 individual properties on equity side * 700 employees (21 b assets) North America, 330 Europe (12 b assets), 175 Asia-Pacific (6 b assets) * Floating Rate book in Japan * 61% debt, 39% equity; most assets are office than owner occupied; mostly operated in North America. * Investment by NEA (Net Earning Assets) 10MM- 50MM (MM = 1 Million) * Thin amortization over 30 years, 3 year hold at the end which causes a large balloon payment in the end (311 deals) * Originators, underwriters; people trying to get deal approved by specialists * Pulling specific levels to get deal closed * Stamford building (treasury building) raises the debt to fund equity transactions, it doesn’t create income in this building that is the Norwalk office (equity building). GECAS- GE Capital Aviation Services: * Aircraft leasing- 500 employees worldwide, a smaller and lean business * Engine leasing, asset management services (parts), airline......

Words: 1614 - Pages: 7

Premium Essay

Deloitte Case Food for Thought

...Question 1: The total consideration transferred by Allfoods in the acquisition of Baked Beans is $135 million.  The considerations consisted of cash paid, stock issued, and the fair values of a contingent consideration and precombination services   This final calculation was determined by reviewing FASB Accounting Standard Codification 805 “Business Combinations”. Authoritative Literature: The $40 million in cash transferred by Allfoods is included in the overall considerations according to ASC Section 805-20-30-1 “Measurement Principle.  The Section states, “The acquirer shall measure the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at their acquisition-date fair values.” The second part of the consideration transferred was the two million shares of Allfoods common stock.  When the business combination was announced, the share price of Allfoods was $30 and when Baked Beans was acquired, the share price was $35.  In accordance with ASC Section 805-10-25-23 “Acquisition-Related Costs”, the price of the stock at the acquisition date is the amount that should be used in the calculation.  Per Section 25-23, “The acquirer shall account for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received, with one exception. The costs to issue debt or equity securities shall be recognized in accordance with other applicable GAAP.”  Since two million shares were issued at......

Words: 1131 - Pages: 5

Premium Essay

Unit 12 Assignment 1

...Unit 12: Crime and its Effects on Society Assignment 1: Crime and Order Legislation Assessment Criteria | P1, M1 and D1 | Duration | 6 Weeks | Number of Tasks | 3 | Hand in Date | 30th January 2015 | Tutor | Mr Ellis | Internal Verifier | Mr Yates | Assessment Criteria Pass | P1 - Outline current crime and disorder legislation. | Merit | M1 - Analyse the impact of two pieces of crime and disorder legislation. | Distinction | D1 - Evaluate the impact of one piece of crime and disorder legislation. | Scenario As part of your interest in the criminal behaviour you have successfully gained a placement at a local magistrate’s court. You have been asked to prepare some materials for an open day for members of the public. Task 1: You have been asked to produce an information leaflet outlining current crime and disorder legislation. In your leaflet you should consider relevant legislation such as: Anti-Social Behaviour Act 2003, Crime and Disorder Act 1998, Police Reform Act 2002, Criminal Justice Act 2003, Anti-social Behaviour, Crime and Policing Act 2014. This provides evidence for Unit 12 P1 Task 2: In order to expand on this you should analyse the impact of 2 pieces of legislation on individuals (offenders, victims and witnesses), communities and the relevant public service. This provides evidence for Unit 12 M1 Task 3: Finally you should evaluate one specific piece of legislation, whilst looking at the impact on all levels (including individual,......

Words: 307 - Pages: 2

Premium Essay

Deloitte Case 13-08

...Case 13-08 overview M international (M) and W Inc (W) decided to enter a long term litigation, due to a patent rights violation. M being the demandant and W the respondent. Not enough information was provided in relation to the charges or the patent. To properly understand the events a chronological descripcion of the litigation is to be provided. Events: Problems to be addressed Is necessary to understand the proper and logical accounting literature to address the matter previously presented. The case it self provides a series of matters to be attends, these matters have to be address in accordance to the General Accepted Accounting Principles. Matters to be discussed: * The liability to be recorded by M financial statements, for the year-end December 31, 2007 * What adjustments should be done if any, for the year-ended December 31, 2009, financial statements; should the amount be recognized as a 2009 event or as a prior period adjustment. * When should M record a deduction of the previously recorded loss contingency Solution To understand the topic to be discussed is necessary to understand its basic components. FASB recognizes that companies are often involved in situations where uncertainty exists about whether an obligation will arise and an amount will be disbursed to fulfill or settle the obligation. This is known as a Contingency in the Accounting world. What is a contingency? ASC 450-10-20 defines it as “An existing condition...

Words: 1945 - Pages: 8

Premium Essay

Chapter 12: Neurophysiology 1

...Lecture 12: Neurophysiology 1 Summarize the three basic functions of the nervous system Sensory: detects events and changes in existing conditions, either outside our bodies or inside our bodies Integration, interpretation, information storage, decision making: integrate, interpret and store sensory info to decide whether action should be taken, and to determine what that action should be Motor: sends commands to muscle and glands, instructing them to take appropriate actions: this is called motor activity Draw a diagram that shows the basic divisions of the nervous system In addition to astrocytes, name three other types of neuroglia cells and describe the functions that have been suggested for them Oligodendrocyte: give support to neurons by arranging themselves in rows along nerve fibers. They also produce a phospholipid myelin sheath around axons of neurons in the central nervous system Microglia: small cells with few processes. Seem to be the brain’s macrophages - they phagocytize bacteria and cellular debris, and can migrate into an area of damaged nerves tissue. They play a housekeeping role, and eat up neurons that may have been damaged or killed by disease, trauma, etc. Ependyma: Cuboidal or columnar in shape and may have cilia. Form a continuous epithelial limning for the ventricles of the brain and the central canal of the spinal cord Describe all the possible functions of astrocytes important in the uptake of glucose from the......

Words: 1141 - Pages: 5

Premium Essay

Econ 1 Jan 12

...Examination January 2012 Economics Unit 1 ECON1 Markets and Market Failure Thursday 12 January 2012 9.00 am to 10.15 am For this paper you must have:  an objective test answer sheet  a black ball-point pen  an AQA 8-page answer book. You may use a calculator. Time allowed  1 hour 15 minutes Section A (ECON1/1)  Answer all questions on your objective test answer sheet.  Use a black ball-point pen. Do not use pencil.  Do all rough work in this question paper, not on your objective test answer sheet. Section B (ECON1/2)  Answer EITHER Context 1 OR Context 2.  Use black ink or black ball-point pen. Pencil should only be used for drawing.  Write the information required on the front of your answer book. The Examining Body for this paper is AQA. The Paper Reference is ECON1/2. Information The maximum mark for this paper is 75.  There are 25 marks for Section A. Each question carries one mark. No deductions will be made for wrong answers.  There are 50 marks for Section B. The marks for questions are shown in brackets.  You will be marked on your ability to: – use good English – organise information clearly – use specialist vocabulary where appropriate.  Advice  You are advised to spend no more than 25 minutes on Section A and at least 50 minutes on Section B. G/T76935/Jan12/ECON1 6/6/6/6/ ECON1 2 Section A: Objective Test Answer all questions in Section A. Each question carries 1 mark. No deductions......

Words: 3430 - Pages: 14

Premium Essay

Deloitte Case Study

...• In this case Deloitte & Touche Consulting Group was tasked to come in and consult with SKS Manufacturing, an auto supplier, in order to fix their inventory problems along with other issues the company was facing. Maria Chen would lead part of the team for her first time on this 12-week engagement, but would in occur some difficulties throughout the first 6 weeks of the project. The Deloitte team has a lot of work to do before the end of the engagement in order stabilize the company and prepare them for a more radical long term project that plans to “reengineer” their business process. Most of the responsibility for the slow start on the project is resting on Chen’s shoulders due to the choices she has made during the first half of this engagement. Why does SKS need Deloitte’s services? Would you have approached the improvement problem in the same way as Deloitte in terms of defining the problem and work planning? SKS needs Deloitte’s services for a number of reasons with the main influence being that they were having a cash flow problem, and they didn’t have the experience or manpower to address this problem themselves. As there were a number of unfinished components sitting between presses and “‘split-batches’” making the production shop “a little chaotic”, their whole process scheduling likely had issues. Additionally, they were having difficulty maintaining acceptable levels of customer service by being late to ship a significant proportion of the......

Words: 3269 - Pages: 14

Free Essay

12 Angry Men Case

...12 Angry Men is a gripping drama that depicts twelve American jurors confined to a jury room on a hot and humid summer day to decide the guilt or innocence of a defendant in a murder trial.1 Before sending out the twelve jurors to deliberate, the judge reminds them that their verdict must be unanimous and that if they hold “reasonable doubt” as to the guilt of the accused then their verdict must be “not guilty.” If, however, they find the defendant guilty then he will be sentenced to death. Eleven of the jurors, believing that the prosecution has presented an “open-and-shut”case,quickly vote for conviction.They believe that the young, poor Puerto Rican defendant, who has a criminal record and lives in the “slums,” killed his father with a switchblade knife. The sole initial dissenter is Juror 8, played in the film by Henry Fonda, who votes“not guilty” as the deliberations begin. As the film proceeds, he deconstructs the pros- ecution’s case, progressing from communicating a sense of vague uneasiness to articulating a precise refutation of the other jurors’ specific arguments. The Negotiation Environment To analyze the negotiation environment in 12 Angry Men, we adopt the methodology outlined by Rojot (1991), who wrote that a negotiation is structured by the relationship between the parties, the resources and con- straints within the environment, and the bargaining power. Rojot identified two significant dimensions for evaluating the......

Words: 963 - Pages: 4

Premium Essay

Ops - Deloitte Case

...Deloitte & Touche Consulting Group Issues: 1. Juniors leading the team – senior manager not present enough in the engagement. No top-down communication 2. lack of communication across all levels (consultants, with clients, within the company) – across the two projects going on for SKS. 3. Inventory management – SKS not utilising the existing framework in place - High inventory held - poor sales forecasts due to lack of communication - lack of synchronisation between procurement, production, design team (BOM), IT, sales and a/c receivables due to poor control systems - cash flow shortage (link from kumar) Fishbone notes: Issue – The plant is fucked up. Causes: Man/People - resistant to change/lack of communication = lack of trust + understanding = because each function works in silos/lack of leadership Machine/Equipment – Method/Process – inefficiencies in their manufacturing process resulting in bottlenecks/dirty, unorganised plant/ Materials RPA – in excel sheet Recommendations: 1. More involvement with the senior managers – i.e. Annette a. Daily morning check-ins for those on site. \weekly meeting (in person) with senior consultants b. More direction 2. Formal change management and communication process c. Town halls meetings d. Weekly meetings with senior management e. Shareholders need to kept up to date f. GANTT chart - Kumar g. Flywheel of commitment h. Map out networks –......

Words: 252 - Pages: 2