Chapter 6

INTEGRATIVE CASE 6.1: Page 486 to 491

INTEGRATIVE CASE 6.1 Starbucks Starbucks disc Policies Exhibits 1.26-1.28 of Integrative Case 1.1 (Chapter 1) present the financiat Starbucks for 2009-2012. The following presents the majority of the items s in its first note to the financial statements, "Summary of Significant Accouning poulcks dt Note 1: Summary of Significant Accounting Polici Preparing financial statements in conformity with accounting principles generally the United States of America ("GAAP") requires management to make estimates and aied ih tions that affect the reported amounts of assets, liabilities, revenues and expenses. Exa include, but are not limited to, estimates for asset and goodwill impairments, stock-ba compensation forfeiture rates, future asset retirement obligations, and inventory re accepted in Estimates and Assumptions mp. es sed reserves ue assumptions underlying self insurance reserves and income from unredeemed stored cards and the potential outcome of future tax consequences of events that have been r nized in the financial statements. Actual results and outcomes may differ from these estimates and assumptions. Fair Value Fair value is the price we would receive to sell an asset or pay to transfer a liability (exit price) in an orderly transaction between market participants. For financial instruments and invest ments that we record or disclose at fair value, we determine fair value based upon the quoted market price as of the last day of the fiscal period, if available. If a quoted market price is not available for identical assets, we determine fair value based upon the quoted market price of similar assets or using a variety of other valuation methodologies. We determine fair value of our auction rate securities using an internally developed valuation model, using inputs that include interest rate curves, credit and liquidity spreads, and effective maturity. short- on the quoted market prices for the same or similar issu for debt of the e carrying value of cash and cash equivalents approximates fair value because of the term nature of these instruments. The fair value of our long-term debt is estimated based same remaining maturities. es or on the current rates offered to us when they are determined to be other-than temporarily impaired. Fair values are determi using available quoted market prices or discounted cash fl We me asure our equity and cost method investments at fair value on a nonrecurring bas INTEGRATIVE CASE 6.1 Starbucks Starbucks disc Policies Exhibits 1.26-1.28 of Integrative Case 1.1 (Chapter 1) present the financiat Starbucks for 2009-2012. The following presents the majority of the items s in its first note to the financial statements, "Summary of Significant Accouning poulcks dt Note 1: Summary of Significant Accounting Polici Preparing financial statements in conformity with accounting principles generally the United States of America ("GAAP") requires management to make estimates and aied ih tions that affect the reported amounts of assets, liabilities, revenues and expenses. Exa include, but are not limited to, estimates for asset and goodwill impairments, stock-ba compensation forfeiture rates, future asset retirement obligations, and inventory re accepted in Estimates and Assumptions mp. es sed reserves ue assumptions underlying self insurance reserves and income from unredeemed stored cards and the potential outcome of future tax consequences of events that have been r nized in the financial statements. Actual results and outcomes may differ from these estimates and assumptions. Fair Value Fair value is the price we would receive to sell an asset or pay to transfer a liability (exit price) in an orderly transaction between market participants. For financial instruments and invest ments that we record or disclose at fair value, we determine fair value based upon the quoted market price as of the last day of the fiscal period, if available. If a quoted market price is not available for identical assets, we determine fair value based upon the quoted market price of similar assets or using a variety of other valuation methodologies. We determine fair value of our auction rate securities using an internally developed valuation model, using inputs that include interest rate curves, credit and liquidity spreads, and effective maturity. short- on the quoted market prices for the same or similar issu for debt of the e carrying value of cash and cash equivalents approximates fair value because of the term nature of these instruments. The fair value of our long-term debt is estimated based same remaining maturities. es or on the current rates offered to us when they are determined to be other-than temporarily impaired. Fair values are determi using available quoted market prices or discounted cash fl We me asure our equity and cost method investments at fair value on a nonrecurring bas