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Apple Case.docx-Apple Case The amount listed for
Apple_Case.docx-Apple Case The amount listed for
Apple Case.docx-Apple Case The amou...
Apple_Case.docx-Apple Case The amount listed for
Page 1
Apple Case
The amount listed for total shareholder’s equity (book value) on Apple’s balance sheet is
far less than the market value of its equity.
We can’t observe the economic value of the firm but
it is likely to be similar to the market value, so it is also is much greater than shareholders’
equity.
1.
For each asset and liability listed on Apple’s balance sheet, consider reasons why the
economic value might differ from the value listed on the balance sheet.
For example,
why might the economic value of inventories differ from the number in the balance sheet.
Keep in mind that the values may differ due to 1) accounting rules that call for recording
a value that is different from the economic value, 2) the difficulty of estimating the value
of the assets or liabilities or 3) intentional manipulation.
2.
Consider what assets or liabilities that are not listed on the financial statements may
involve an unrecorded economic asset or liability.
3.
What assets or liabilities are the most likely to be responsible for the huge difference
between the economic value and book value of Apple?


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