Harnischfeger Corporation

Harnischfeger Corporation There were umteen accounting policy changes and accounting estimates that Harnischfeger make during 1984. In flier two, the dispraise method was changed from accelerated to slap-up line method, applied on plants, machinery and equipment. The cumulative deed increase net income for 1984 by $11 meg or $.93 per plebeian and equivalent share. As a result of the review of its depreciation policy, the Corporation changed its estimated depreciation lives on certain U.S. plants, machinery, and equipment and residual value on certain machinery and equipment, which increase net income for 1984 by $3.2 one million million or $.27 per share. The company changed the financial year ending from July 31 to September 30 in 1984 for certain foreign subsidiaries. This increased net sales by $5.4 million in 1984. Harnischfeger began to allow in products purchased from Kobe Steel Ltd. and sold to third parties by the company in its net sales. This increased sales in 1984 by $28 million. In note six, the companys question and developing expense in 1984 decreased by $7 million from 1983. Kobe agreed to give up to $17 million to Harnischfeger for their research and development expense for three years. In note seven, the effect of the LIFO liquidations increased net income by 2.4 million.

In note eleven, the company changed its rate of return assumption for determining award expense from 8% in 1983 to 9% in 1984. This on with restructuring its pension plan reduced the pension expense by $4 million in 1984. There are many motives for the management of Harnischfeger to make the changes they made in the financial report policies. One is that management is given bonuses if the company has a profit, which provides an motivator for managers to everything they can to get profit as high as it can be. Management may also have targets that they bespeak to meet in coiffe to keep their job. Changing the reporting policies could also increase... If you want to get a full essay, order it on our website: Orderessay

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