...The University of Oregon “The Bear Minimum” Case ACTG 352: Intermediate Accounting III October 9th, 2014 To: Big Bear Power Date: October 7, 2014 Re: The Bear Minimum Summary Big Bear Power, a public utility company, has entered into a 10-year non-cancelable agreement with Goliath Company to lease a turbine. The lease is effective on January 1, 2011. The purpose of this report is to provide Big Bear with insight in evaluating whether the costs or potential costs associated with the lease should be included in the “minimum lease payments” according to US GAAP Accounting Standards Codification. When assessing the minimum lease payments, we reviewed the legal costs incurred to Big Bear’s external legal counsel (Stripe, Berry, Mills, and Buck LLP) pertaining to the negotiation of the lease terms. We also examined the provision requiring Big Bear to pay a penalty if it were to default under its current credit arrangement with its bank, as well as the effect on monthly payments that are subject to an increase in the consumer price index calculation. Provision One First we will review the costs incurred during the negotiating of the lease terms. Big Bear is required to pay its external legal counsel $500,000 in legal costs. This amount should not be included in its minimum monthly payments because per accounting guidance ASC 840-10-25-5: For a lessee, minimum lease payments comprise the payments that the lessee is obligated to make or can be required to...
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...Background Big Bear Power is a public utility with a strong financial position for the past several years. As a result of having a positive cash flow, Big Bear is in compliance with all of its debt covenants. Big Bear has entered a 10 year non-cancelable lease with Goliath Company for a combustion turbine. The lease is signed on December 15, 2010 and the right to use the turbine begins on January 1, 2011. Relevant Issues and Case Facts The case focuses on whether certain costs and provisions associated with the lease would be included in “minimum lease payments” under ASC 840 under leases. There are three specific provisions under question: legal fees paid in negotiating the lease contract, a possible penalty paid by Big Bear to Goliath in the event that Big Bear a “material adverse change” that leads to a default on its debt covenants, and increasing level rents equal to the increase in consumer price index. Provision 1: In negotiating the lease, Big Bear has paid $500,000 to it outside legal counsel. Big Bear is also required to pay $1 million in legal fees incurred by Goliath. Provision 2: A provision in the lease states that Big Bear must pay a penalty to Goliath if Big Bear’s bank declares a default under its primary credit arrangement. The provision is dependent upon whether or not there is a “material adverse change” in Big Bear’s financial condition. Big Bear believes that the likelihood of default is remote. Goliath and Big Bear’s bank have no relationship...
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...“The Bear Minimum” Case 08-4 Blakely Broom Connor Greco Spencer Craft Big Bear Power, a widely held public utility company, has agreed to a 10-year non-cancelable lease of a combustion turbine from Goliath Co. The lease was signed on December 15, 2010, and begins on January 1, 2011. The lease requires Big Bear to pay $1 million of legal fees incurred by Goliath, and third party legal fees as part of the lease. The lease also states that if a change in control event occurs, Big Bear must purchase the equipment leased from Goliath Co. within 30 days at a price equal to the remaining lease payments. This provision also indicates that a change in control also requires Big Bear to pay a penalty of $500,000. The last provision describes the rental payments, which are directly related to CPI. One of the first issues involved in calculating the present value of the minimal lease payments is figuring out what type of lease this is. This includes figuring out what the present value of the minimum rental payments are, the guaranteed residual value after the lease term ends, penalty for failure to renew or extend, and bargain purchase options, if any. Once we figure this we add the executory costs included in the payments to the minimal lease payments and calculate the present value by using the discount rate. Since this is a non-cancelable lease and it passes the final criterion mentioned in section 840-10-25-1, in that the minimum lease payments exceeds 90% the fair value...
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...Article Essay: Protecting Sacred Grizzlies Grizzly bears are under federal protection because they almost went extinct in the early 1900s. Native Americans want to protect grizzly bears in the West. Grizzly bears should be kept under a threatened status and be protected by the federal government. Grizzly bears should be protected because they are sacred to Native Americans, they should not be hunted for sport, and they are still a threatened animal. Federal and state officials have fought to reverse the threatened status on grizzly bears. Native American tribes are endlessly fighting to ensure the grizzly bear population is safe from over hunting. Grizzly bears are sacred to Native Americans and that should be a good reason to not remove protection over them. According to Ben Nuvamasa, the former chairman of the Hopi Tribe in Arizona, the Hopi Tribe sees grizzly bears as their family....
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...What happens when soda is poured into a glass to quickly before it has time to settle? It spills over the edge and out of the glass, damaging anything in its path. This is what happens to the atmosphere when greenhouse gases are being pumped into it faster than it can be absorbed. Many people believe that global warming is a problem that can only be solved by big companies and the government. What happens when the government is handing out millions of dollars in tax breaks to big oil companies that are polluting our earth and no one is doing anything to stop them? People do not understand the amount of damage just a single person can do to the air around us. Global Warming is a growing problem around the world and it cannot be ignored any longer. The earth is suffering from the abuse of humans and when it is gone it cannot be replaced. The question is not if global warming is going to get worse, it is when and what people are going to do to stop it. Global Warming is by no means a new or recently discovered issue throughout the world. However, it has taken many years for the issue to get the attention it deserves and so desperately needs. In the 1970’s and 1980’s, scientists discovered changes in weather in relation to global warming. However, people denied it saying it is a recurring pattern. “Nobody worried about the change. The meteorologists explained that weather patterns always did vary modestly, in cycles lasting a few decades or centuries. If the mid-twentieth century...
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...need to develop and improve this ability through training and learning with actual experience, with actual encounter in the challenges in life and with interaction to the group you been leading. As with David, his ability was developed thru experience, as a shepherd, his leadership ability was molded with everyday interaction with his father’s goats and sheep. With using his club he make them follow him and obey what he intended to say. And as a leader he also learned how to protect them even facing big animals like lions and bears. b. HOW DID DAVID’S EXPERIENCES (CITE THOSE EXPERIENCES) AS A SHEPHERD CONTRIBUTED TO HIS VICTORY OVER GOLIATH? David had confidence in his ability because of his past experience fighting lions and bears while guarding his father’s goats and sheep. He used that past experience to fight Goliath. He is so persistent to fight Goliath and insisted that fighting Goliath is no difference with fighting lions and bears. He sighted that when a lion or a bear comes to steal a lamb from the flock; he goes after it with his club and rescues the lamb from its mouth. If the animal turns on him, he catches it by the jaw and clubs it to death. c. HOW DID DAVID’S ATTITUDE: 1) AS A SON, 2) AS A SHEPHERD, AND FAITH IN GOD HELPED HIM MOLD HIS CHARACTER AND LEADERSHIP SKILLS? ANSWER EACH SEPARATELY As SON – David is so obedient, even as youngest son of his father he never complained that he is the one taking care of their goats and sheep. Having the responsibility...
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...Imagine you are a polar bear, and you want to get to shore, but you can't because it's too long of a swim, because the ice caps at the shore have melted and the ice caps you are on our floating further and further away becauses of greenhouse gas effects on the environment. Therefore you can't get home, you can't get food, and you can't survive. The polar bear was added to the endangered animal list in 2008 because of multiple causes, most are from impacts caused by greenhouse gases. Greenhouse gases in Alaska and Northern Canada have three major Impacts on polar bears and their ecosystem: Greenhouse gases cause pollution in the ecosystem. They cause climate change in the ecosystem, melting the ice caps the polar bears live on, and lastly the greenhouse gases cause shorter hunting seasons, less food for the polar bears, and bad body conditions for polar bears, causing the polar bear population to go down....
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...Gun control and the Second Amendment The United States Constitution says that U.S. Citizens have the right to bear arms. Even though this guarantee was written with no constraints, there are now laws that limit certain aspects of gun ownership. The reasons for gun control fall under the flag of public safety. Though there are many safety reasons why private ownership of firearms should be banned, these arguments are outweighed not only by the need for protection, but because the limitation of ownership rights could become dangerous to personal freedom. When the U.S. Constitution was written, some delegates thought Militia was military forces because the Federal Government had its own army to protect the people. The second amendment was made in response to the fear of being helpless before a standing professional army. "Aristotle said that decisions of a leader 'backed by a standing army' would be different from those made by a leader 'awed by the fear of an armed people'" (The Commission on the Bicentennial of the United States Constitution, 28). Elbridge Gerry, a delagate to the Constitutional convention from Massachusetts, was an activist for the right of the Militia to bear arms. When asked what use a Militia has, he responded: "What sir, is the use of a Militia? It is to prevent the establishment of a standing army, the bane of liberty" (The Commission of the Bicentennial...
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...Article 231 effectively blames Germany for the war and states that Germany must accept total responsibility. By forcing Germany to accept total responsibility for the war, the other countries are exempt from penalty. Also, Germany had to shoulder the cost for all the reparations even though the damage was done by both the Allies and the Central Powers. Only Germany will bear the shame and blame which shows that The Big Three negotiated the conditions of the Treaty to increase their personal benefit. The military clause was the harshest and most damaging clause, and was greatly disapproved of by Germany. The size and power of the German army was one of her greatest assets. By restricting her to an army of only 100,000 volunteers, the Treaty left her defenseless and vulnerable. For such a large country, an army of 100,000 men was just big enough to keep order within Germany at that time of political unrest and instability, but was not large enough to defend Germany from other invading powers. The army was a symbol of German pride and an important political source of nationalism. Having almost half of it taken away ruined Germany's Great Power status, and made her an easy target for other countries. In addition, the Rhineland became a demilitarized zone, meaning that Germany...
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...The Crazy Bear group -Chain of venues only across England. Only 4 -Fitztrovia -Stadhampton -Beaconsfeild -Covent Garden All four are Hotels…which include use for… -spa -Restaurants -Terrace -Private prties -Weddings -Meetings Private members cub….Also allows access to the private members club in Covent Garden Monthly members parties To Launch Crazy Bear group in Dubai Strengths for my Brand?? Private members club-customers feel special Offers Job opportunities to locals…….Arabian business.com says MENA region needs to create 40 million jobs in 20 years to keep the economy afloat Crazy Bear is only in the Uk…therefore bringing a new concept to the middle east Adapting my Brand I will need to adapt my brand to the middle east as their rules and regulations are different to the UK. Such as men and women cannot meet or travel together unless they are family. Maybe just for business’s?….familys only? Core Business…Most Prospect…Opportunity…Lower opportunity Reference Kotler….3 components…Need,Want, Demand. 5 product Levels…Core Benefit….Generic Product….Expected product….Augmentd Product….Potential product 12 Month Plan The UAE has 4 social classes…. 1- The ruling sheikhly families, these members hold the highest political positions and power and have great amounts of wealth and prestige 2- The merchant class known as al-tujjar. Traditionally pearling merchants who now sell international consumer goods. 3- The new middle class, which...
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...French Revolution and Napoleonic Era Worksheet CHRISTOPHER POWERS HIS/114 Chris McAbee March 9, 2015 Liberty influenced members of the Third Estate. These members considered themselves an oppressed group. (Revolutionary ideas) They were oppresses politically, socially and legally. The King had the power to impress his political opponents and sentenced them to prison without a trial. Torture was used quite often to interrogate suspects and witnesses. (Revolutionary ideas) Even though this was happening, the people of France were still better off than others in other parts of Europe. The people of France had more liberties. It was also known that everyone born had the right to inherit life, liberty and property. When it came to equality, the French Social structures was bitterly unfair. The middle class was denied political representation and participation. Concepts of equality and society were reinforced by the success of the American Revolution and the Declaration of Independence. Brotherhood was big in the community. Some were identified by their religious views based in their Christian Brotherhood. The Enlightenment produced the intellectual and political Hubris of 1789. (Revolutionary ideas.) The French Revolution was caused by the fiscal irresponsibility if the monarch (The Silver Bear Cafe) The Clergy and the nobles did not have to pay taxes. This hurt the finances tremendously. France was still hurting from the seven year war. Due to the bad weather,...
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...AA financial compensation Jay Bilas, an ESPN college basketball analyst and former Duke University college basketball player, believes student-athletes should be paid. Bilas advocates a free market approach where athletes could reap whatever the market will bear. “No other person is told they’re limited in what they can earn…only an athlete,” Bilas says in an interview with the Virginian Pilot. The free market approach would allow student-athletes to let schools bid on them and their athletic talents, and the highest bidder on a student-athlete would get that player. The National College Players Association (NCPA) released a comprehensive report on “The Price of Poverty in Big Time College Sports” on the NCAA where they found the fair market...
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...Currently, it is known that Big 4 dominated the audit market so it is regarded as audit market concentration. What if the audit market becomes more concentrated, let say Big 4 becomes Big 3, how it will affect the audit quality? According to the research conducted by Francis, Michas, and Seavey (2011), it shows that increased concentration within Big 4 will decrease the audit quality because the clients tend to have larger accruals, are less likely to report losses and exhibit less timely recognition. So, why increased concentration within Big 4 leads to lower audit quality? It will be explained in the following. Firstly, it will reduce long term switching rates and thus it will increase the risk of client’s manipulation. As known, large companies in complex sector, such as financial service field, mostly choose the audit service from Big 4 due to its abundant resources. Therefore, those large companies only switch to another audit firm within Big 4 when those companies switch audit firm. However, when audit market becomes more concentrated, large companies will reduce their long term switching rate. Lower switching rate means that large companies will be more reluctant to switch their audit firm. Therefore, it will be easier for large companies to manipulate their earning because their bargaining power will also increase. For Big 3, they may choose to allow them manipulate to retain those large clients. Therefore, the audit quality will become worse. It is as same as...
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...Have a look at the wide variety of stakeholders that form a key component of Mallen Baker's definition of CSR, including the diagram at http://mallenbaker.net/csr/definition.php. How can an organization begin to balance such an array of competing stakeholder interests? What is your source for Google (url). According to Mallen Barker and his definition of CSR companies are responsible for the management of their business and the positive or negative social impact they can cause. Based on this principle, if an organization wants to maintain a balance between the best interests of all stakeholders it will have to start by maintaining quality of management. In other words, CSR is a company’s commitment to the performance of improving the quality of life for the community and a society. A good example is the company Google and their famous charter “Don’t be evil.” By always keeping to their charter, and having it be so simple that they can often easily answer to themselves about whether certain actions fall under their ideals, Google was able to make the difficult task of balancing the interest of all stake holders more manageable. I believe that by clearly stating and documenting simple values to be followed a company can look to do what is right in the face of competing stakeholder interests, and feel comfortable in the decisions they make. 2. Look at some of the causes that Ben & Jerry's promotes at http://www.benjerry.com/activism/inside-the-pint/. a. Do you agree with...
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...Amendment to the Constitution(Second Amendment) of the United States of America(USA) is one of the most controversial. The Second Amendment specifically grants that, "the right of the people to keep and bear Arms shall not be infringed" The way that an individual interprets the wording of the Second Amendment influences their point of view on who has the right to "keep and bear arms" (Amendment 2). The controversy brought on by the Second Amendment is because the Second Amendment does not clearly define whom "the people" are. This ambiguity has left room for action by legislative bodies and the courts to pass laws and make interpretations that influence the way this Amendment is applied and enforced. The Second Amendment says, "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms shall not be infringed." (Amendment 2). A central argument put forth by gun-control advocates is that since there is no longer a "militia", that individuals should lose their rights to own a gun. They often assert that the term "militia" should now be defined as each state's National Guard or Reserves. On the other hand, anti gun control advocates argue that the Second Amendment clearly states that the people have the right to own and bear arms even if they are not part of an organized militia. II. ANTI GUN CONTROL ACTIVISTS VIEWS AND BASIS Anti-gun control activists interpret the Second Amendment as saying that any individual, weather...
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