{"id":25808,"date":"2023-08-01T22:49:28","date_gmt":"2023-08-01T22:49:28","guid":{"rendered":"https:\/\/www.goodacademic.com\/blog\/questions\/back-to-the-future-or-how-a-product-sold-almost-60-years-ago-resulted-in-a-current-financial-statement-restatement\/"},"modified":"2023-08-01T22:49:28","modified_gmt":"2023-08-01T22:49:28","slug":"back-to-the-future-or-how-a-product-sold-almost-60-years-ago-resulted-in-a-current-financial-statement-restatement","status":"publish","type":"questions","link":"https:\/\/www.goodacademic.com\/blog\/questions\/back-to-the-future-or-how-a-product-sold-almost-60-years-ago-resulted-in-a-current-financial-statement-restatement\/","title":{"rendered":"&#8220;Back to the Future&#8221; (Or How a Product, Sold Almost 60 Years Ago, Resulted in a Current Financial Statement Restatement)"},"content":{"rendered":"<p style=\"margin: 12px 0px; cursor: auto; color: inherit;\"><strong style=\"font-weight: bold; cursor: auto; color: inherit;\">Read the following Case Study:<\/strong><\/p>\n<p style=\"margin: 12px 0px; cursor: auto; color: inherit;\">Franz, D. R. (2018).<span style=\"cursor: auto; color: inherit;\">&nbsp;<\/span><a style=\"cursor: auto;\"><span style=\"cursor: auto; color: inherit;\">\u201cBack to the future\u201d (or how a product last sold almost 60 years ago resulted in a current financial statement restatement)&nbsp;<\/span><span style=\"cursor: auto; color: inherit;\"><span style=\"margin: -1px; cursor: auto; color: inherit;\">https:\/\/eds-p-ebscohost-com.csuglobal.idm.oclc.org\/eds\/detail\/detail?vid=0&amp;sid=cc56c483-40dc-4ea4-a0d8-a12726af0d23%40redis&amp;bdata=JnNpdGU9ZWRzLWxpdmU%3d#AN=129502948&amp;db=bth<\/span><\/span><\/a>.<span style=\"cursor: auto; color: inherit;\">&nbsp;<\/span><em style=\"cursor: auto; color: inherit;\">Issues in Accounting Education, 33<\/em>(2), 9\u201317.<\/p>\n<p style=\"margin: 12px 0px; cursor: auto; color: inherit;\"><strong style=\"font-weight: bold; cursor: auto; color: inherit;\">Answer the following questions:<\/strong><\/p>\n<p style=\"margin: 12px 0px; cursor: auto; color: inherit;\">In preparing your answers for questions 1 to 4, you will need to refer to OI\u2019s amended 10-K for 2015, which can be found by clicking<span style=\"cursor: auto; color: inherit;\">&nbsp;<\/span><a style=\"cursor: auto;\"><span style=\"cursor: auto; color: inherit;\">here<\/span><span style=\"cursor: auto; color: inherit;\"><span style=\"margin: -1px; cursor: auto; color: inherit;\">Links to an external site.<\/span><\/span><\/a>.<\/p>\n<ul style=\"margin-right: 0px; margin-bottom: 6px; margin-left: 25px; cursor: auto; color: inherit;\">\n<li style=\"cursor: auto; color: inherit;\">What journal entry would OI have made to record the additional $295 million of asbestos liability?<\/li>\n<li style=\"cursor: auto; color: inherit;\">Briefly summarize the effect of the restatement on the following financial statements.\n<ul style=\"margin-right: 0px; margin-left: 25px; cursor: auto; color: inherit;\">\n<li style=\"cursor: auto; color: inherit;\">The income statement.<\/li>\n<li style=\"cursor: auto; color: inherit;\">The balance sheet.<\/li>\n<li style=\"cursor: auto; color: inherit;\">The statement of cash flows.<\/li>\n<li style=\"cursor: auto; color: inherit;\">The statement of share owners\u2019 equity.<br style=\"cursor: auto; color: inherit;\">What accounts were affected? By how much? What other disclosures were impacted? Note 1 in the restated 2015 10-K describes the changes.&nbsp; &nbsp;<\/li>\n<\/ul>\n<\/li>\n<li style=\"cursor: auto; color: inherit;\">Explain why OI\u2019s treatment resulted in an increase to the earnings for 2015, 2014, and 2013.<\/li>\n<li style=\"cursor: auto; color: inherit;\">Based on OI\u2019s disclosures in the 10-K prior to restatement, was it clear that the firm was using a three-year period to estimate asbestos litigation? Be sure to explain your response.<\/li>\n<li style=\"cursor: auto; color: inherit;\">The discussion between the SEC and OI was extensive and interesting. Appendix A shows all of the correspondence between the two and includes web links to the letters. The following questions are based on those letters and the information in the case.\n<ul style=\"margin-right: 0px; margin-left: 25px; cursor: auto; color: inherit;\">\n<li style=\"cursor: auto; color: inherit;\">Briefly summarize OI\u2019s justification of its treatment of the unasserted asbestos liability. What are the pros and cons of OI\u2019s original treatment of the asbestos liability?<\/li>\n<li style=\"cursor: auto; color: inherit;\">Briefly summarize the SEC\u2019s position regarding the treatment of the unasserted asbestos liability. What are the pros and cons of the SEC\u2019s approach?<\/li>\n<li style=\"cursor: auto; color: inherit;\">Which approach do you find preferable and why? You can choose either OI or the SEC, but your analysis needs to be based on something other than the fact that the SEC prevailed or OI did not.<\/li>\n<\/ul>\n<\/li>\n<li style=\"cursor: auto; color: inherit;\">How is OI\u2019s experience with asbestos litigation similar to Garlock\u2019s? How is it different?<\/li>\n<li style=\"cursor: auto; color: inherit;\">Approaching this issue as a member of OI\u2019s executive management group, describe how your approach to asbestos litigation would be similar to or different from OI\u2019s.<\/li>\n<\/ul>\n<p style=\"margin: 12px 0px; cursor: auto; color: inherit;\"><strong style=\"font-weight: bold; cursor: auto; color: inherit;\">Submission Requirements:<\/strong><\/p>\n<ul style=\"margin-right: 0px; margin-bottom: 6px; margin-left: 25px; cursor: auto; color: inherit;\">\n<li style=\"cursor: auto; color: inherit;\">Your Word document should be 8 pages in length (not including the required cover and references pages). It is highly recommended that you include in bold type the questions you are required to answer, with the answers directly underneath each question<\/li>\n<li style=\"cursor: auto; color: inherit;\">You must submit an Excel file as a separate file supporting your submission.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Read the following Case Study: Franz, D. R. (2018).&nbsp;\u201cBack to the future\u201d (or how a product last sold almost 60 years ago resulted in a current financial statement restatement)&nbsp;https:\/\/eds-p-ebscohost-com.csuglobal.idm.oclc.org\/eds\/detail\/detail?vid=0&amp;sid=cc56c483-40dc-4ea4-a0d8-a12726af0d23%40redis&amp;bdata=JnNpdGU9ZWRzLWxpdmU%3d#AN=129502948&amp;db=bth.&nbsp;Issues in Accounting Education, 33(2), 9\u201317. Answer the following questions: In preparing your answers for questions 1 to 4, you will need to refer to OI\u2019s amended [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","meta":[],"disciplines":[644],"paper_types":[],"tagged":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions\/25808"}],"collection":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions"}],"about":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/types\/questions"}],"author":[{"embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/comments?post=25808"}],"version-history":[{"count":0,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions\/25808\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/media?parent=25808"}],"wp:term":[{"taxonomy":"disciplines","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/disciplines?post=25808"},{"taxonomy":"paper_types","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/paper_types?post=25808"},{"taxonomy":"tagged","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/tagged?post=25808"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}