Dell’s Accounting Policies for Revenues, Expenses and Net Income: Dell includes both GAAP and non-GAAP financial measures in its 10k reports. The company claims that excluding certain items GAAP gives managers a better grasp on the financial performance of the company. Dell excludes severance and facility actions, and acquisition related costs from its GAAP financial measures, and also the amortization of intangible assets. Dell acknowledges that its non-GAAP financial measures may not be comparable with other companies that are using their own non-GAAP reporting standards. Dell is increasingly relying on international markets (notably Asia) for its revenue generation. Total net revenue from the US in dropped 5% from 2011 to $30.4 billion in 2012. Meanwhile, revenue from the international market increased 12% from 2011 to 2012. Dell continues to expand in these areas as growth in the US and Western European markets continue to decline. Dell distinguishes its revenues between Product Revenues and Service Revenues. According to GAAP, total operating expenses for Dell increased 18% to 19.4 billion. This is mainly due to what Dell reports as severance costs, acquisitions, and facility costs. Dell differentiates its expenses between Selling, General, and Administrative Expenses, and Research & Development and Engineering Expenses. Net income increased 33% to 3.5 billion on a GAAP basis. Dell attributes this mainly to increases in operating income and a lower effective tax rate.

Dell’s measurement and estimation practices for the following accounting elements: I. Bad Debt Expense II. Revenue Recognition III. Intangible Assets IV. Tax Expense

I. Bad Debt Expense Dell uses the Allowance method to handle uncollectible accounts receivable in regards to its bad debt expense. This accounting method has been known to be used by managers