1- Whatare PepsiCo vision, mission and guiding principle? Ø Vision:At PepsiCo, aim to deliver top tierfinancial performance over the long term, a focus on environmental stewardship,activities to benefit society, byintegrating sustainability into our business strategy, committed to achievingbusiness and financial success while leaving a positive imprint on society.PepsiCo approach to superiorfinancial performance: to drive shareholder value. By addressing social andenvironmental issues, also deliver on our purpose agenda, which consists ofhuman, environmental, and talent sustainability.Ø Mission:As one of the largest food and beverage companies in theworld, PepsiCo mission is to provide consumers around the world affordable,convenient. PepsiCo is committed to investing in its employees,companies and communities where operate to help the company achieve sustainableand long-term growth.Ø Guidingprinciple:PepsiCois committed to six guidelines.
1. Care forour customers, and the world we live in.2. Sell onlyproducts we can be proud of them.
3. Speakwith truth and candor at all times.4. Win withdiversity and inclusion.5. Respectothers and succeed together. 6.
Balanceshort term and long term.2- Companies tendto use the consolidation financial statements rather than Separate financials.Identify the advantages of consolidating the financial statements?In accordance with generally accepted accountingprinciples (GAAP), parent companies must prepare consolidated financialstatements to report on the financial well-being of both parent and all itssubsidiaries.
These data areoften prepared using a financial consolidation program that takes financialfigures from each subsidiary separately and aggregates them into onecomprehensive report. As each subsidiary also prepares its own independentfinancial report, the consolidated financial statements may appear to be an additional,unnecessary step.§ Requiresan entity that controls one or more other entities to present consolidatedfinancial statements;§ Howto apply the principle of control to identify whether an investor controls aninvestee and therefore must consolidate the investee.§ Definedthe accounting requirements for the preparation of consolidated financialstatements.
3- Demand for the company products may be adversely affected bychanges in consumer preferences which may affect significantly demand and couldadversely affect our business, financial condition or results of operations.How do the companies manage this risk?Demand for products may be adverselyaffected by changes in consumer preferences and tastes. If they are unable toinnovate or market their products effectively. Company operates in competitivecategories and depends on the continued demand for its products to generaterevenues and profits, Any changes in consumer preferences or inability toanticipate or respond to such changes result in reduced demand for theirproducts and the erosion of the competitive and financial situation. Theirsuccess depends on their ability to anticipate response to shifts in consumerattitudes, including increasing demand for products, their ability to producenew products, responding to competitive products and price pressures.
There canbe no guarantee of their continued ability to develop and launch successful newproducts. Changes in consumption of product categories or demographiccharacteristics of consumers may result in reduced demand for their products.Consumer preferences may change due to a variety of factors, including consumerconcerns regarding health effects. 4- Write a memo, in no more than 300 words, explaining: (Hint:Explain and support your memo by suitable figures from the annual report.) a. There are two type of leases in accounting explain them and mentionthe GAAPcriteria to consider the lease as capital “Finance” lease explain them indetails. Financeleasing:Long term lease over the life expectancyof the equipment, usually three years or more, the leasing company recovers thefull cost of the equipment, in addition to the fees, over the lease term.
Although you do not own the equipment, you are responsible for maintaining andinsuring it. Leased assets should appear in your budget as a capital element,or items purchased by the company and give the tenant benefits anddisadvantages of ownership and are therefore considered assets and may bedepreciated. While the operating lease is treated as a real lease undergenerally accepted accounting principles (GAAP)Operating lease:The lessee uses the asset for aspecified period. The lessor assumes the risk of obsolescence and incidentalrisks. The Lessor shall bear all expenses. Leasing company will take back theassets at the end of the lease, specialized services are provided by thelessor.
The leasing company is responsible for maintenance and insurance. Thecost of an operating lease is considered an operating expense. There is anoption to either party to terminate the lease after giving notice. In this typeof leasing. b.
Explain the difference between the operatinglease and capital lease accounting wise? Financial Lease Operating Lease Ownership of the asset might be transferred to the lessee at the end of the lease term. The lessor retains ownership during and after the lease period. Financial leasing is treated as a loan in general, the ownership of the assets is considered to be from the lessee and therefore the asset is recognized in the balance sheet. The operating lease is generally treated like a lease. This means that lease payments are treated as operating expenses and the asset does not show in the balance sheet. In financial leasing, the lessee shall bear the insurance, maintenance and taxes.
Lessee only pays the monthly rent amount in the operating Lease Financial lease provides the lessee with an option to purchase less than the fair market value of the asset In an operating lease, the lessee has no option to purchase the asset during the lease term c. How much is theoperating lease obligation in total? Total 2017 2018 – 2019 2020 – 2021 2022 and beyond Operating leases 1,780 423 663 344 350