The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Income in the period that includes the enactment date. Deferred income tax assets are reduced by a valuation allowance when it is more likely than not that some portion of the deferred income tax assets will not be realized. The effective portions of cash flow hedges are recorded in AOCI until the hedged item is recognized in earnings. Deferred gains and losses associated with cash flow hedges of interest income or expense are recognized in other income/, net in the same period as the related income or expense is recognized. The ineffective portions and amounts excluded from the effectiveness testing of cash flow hedges are recognized in other income/, net. All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents.

As a result, retailers often start their fiscal year on February 1st each year. In our opinion, Apple Inc. maintained, in all material respects, effective internal control over financial reporting as of September 30, 2017, based on the COSO criteria. accounting On August 24, 2012, a jury returned a verdict awarding the Company $1.05 billion in its lawsuit against Samsung Electronics Co., Ltd. and affiliated parties in the United States District Court, Northern District of California, San Jose Division.

Sales taxes collected from customers are not considered revenue and are included in accounts payable and accrued liabilities until remitted to the taxing authorities. The Company has stores in 45 states, the District of Columbia, QuickBooks Guam and Puerto Rico. The Company’s operating divisions have historically had similar economic characteristics and are expected to have similar economic characteristics and long-term financial performance in future periods.

The Company is subject to legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. In the opinion of management, there was not at least a company’s fiscal year must correspond with the calendar year. a reasonable possibility the Company may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies for asserted legal and other claims.

Earned Revenues

The Mac App Store, available for Mac computers, allows customers to discover, download and install Mac applications. The TV App Store allows customers access to apps and games specifically for Apple TV. The iBooks Store, available for iOS devices and Mac computers, features e-books from major and independent publishers. Apple Music offers users a curated listening experience with on-demand radio stations that evolve based on a user’s play or download activity and a subscription-based internet streaming service that also provides unlimited access to the Apple Music library. 5,134,312,000 shares of common stock were issued and outstanding as of October 20, 2017. Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 120) An expense account is normally closed by debiting Income Summary and crediting the expense account.

Forecasted transactions, firm commitments and assets and liabilities denominated in foreign currencies were excluded from the model. Based on the results of the model, the Company estimates with 95% confidence, a maximum one-day loss in fair value of $485 million as of September 30, 2017 compared to a maximum one-day loss in fair value of $434 million as of September 24, 2016. Because the Company uses foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset by increases in the fair value of the underlying exposures. Net sales declined 8% or $18.1 billion during 2016 compared to 2015, primarily driven by a year-over-year decrease in iPhone net sales and the effect of weakness in most foreign currencies relative to the U.S. dollar, partially offset by an increase in Services. In April 2016, the Company announced an increase to its capital return program by raising the expected total size of the program from $200 billion to $250 billion through March 2018. This included increasing its share repurchase authorization from $140 billion to $175 billion and raising its quarterly dividend from $0.52 to $0.57 per share beginning in May 2016. During 2016, the Company spent $29.0 billion to repurchase shares of its common stock and paid dividends and dividend equivalents of $12.2 billion.

System redundancy and other continuity measures may be ineffective or inadequate, and the Company’s business continuity and disaster recovery planning may not be sufficient for all eventualities. Such failures or disruptions could adversely impact the Company’s business by, among other things, preventing access to the Company’s online services, interfering with customer transactions or impeding the manufacturing and shipping of the Company’s products. These events could materially adversely affect the Company’s reputation, financial condition and operating results. Substantially all of the Company’s manufacturing is performed in whole or in part by a few outsourcing partners located primarily in Asia. The Company has also outsourced much of its transportation and logistics management. While these arrangements may lower operating costs, they also reduce the Company’s direct control over production and distribution. It is uncertain what effect such diminished control will have on the quality or quantity of products or services, or the Company’s flexibility to respond to changing conditions.

APP and AC+ are fee-based services that extend the coverage of phone support eligibility and hardware warranty repairs. APP and AC+ offer additional coverage under some circumstances for instances of accidental damage and are available in certain countries for certain products. 117) All necessary amounts to prepare the balance sheet, including ending retained earnings, can be found in the Balance Sheet columns of the work sheet. 69) In preparing statements from the adjusted trial balance, the balance sheet must be prepared first. 67) Asset and liability balances are transferred from the adjusted trial balance to the balance sheet.

Additionally, the Company issued $23.9 billion of U.S. dollar-denominated term debt and A$1.4 billion of Australian dollar-denominated term debt during 2016. The Company contracts with numerous third parties to offer their digital content to customers. This includes the right to sell currently available music, movies, TV shows and books. The licensing or other distribution arrangements with these third parties are for relatively short terms and do not guarantee the continuation or renewal of these arrangements on reasonable terms, if at all.

Why Does The Fiscal Year Start In April?

On March 6, 2014, the District Court entered final judgment in favor of the Company in the amount of approximately $930 million. Court of Appeals for the Federal Circuit affirmed in part, and reversed in part, the decision of the District Court. As a result, bookkeeping the Court of Appeals ordered entry of final judgment on damages in the amount of approximately $548 million, with the District Court to determine supplemental damages and interest, as well as damages owed for products subject to the reversal in part.

Accounts such as cash, inventory, and property are on the asset side of the balance sheet, while on the liability side there are accounts such as accounts payable or long-term debt. The exact accounts on a balance sheet will differ by company and by industry. The adjusted trial balance provides the primary basis for the preparation of financial statements. D. Where revenues are reported on the income statement when cash is received and expenses are reported when cash is paid.

The Company capitalizes eligible costs to acquire or develop internal-use software that are incurred subsequent to the preliminary project stage. Capitalized costs related to internal-use software are amortized using the straight-line method over the estimated useful lives of the assets, which range from three to five years. Depreciation and amortization expense on property and equipment was $8.2 billion, $8.3 billion and $9.2 billion during 2017, 2016 and 2015, respectively. All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto. As of September 30, 2017 and September 24, 2016, the Company’s cash, cash equivalents and marketable securities held by foreign subsidiaries were $252.3 billion and $216.0 billion, respectively, and are generally based in U.S. dollar-denominated holdings. Amounts held by foreign subsidiaries are generally subject to U.S. income taxation on repatriation to the U.S. In connection with the State Aid Decision, Ireland is still computing the recovery amount.

Accumulated Depreciation Is:a Contra Asset Account An Expense Accountan Owner’s Equity Accounta Liability Account

Accordingly, any gains or losses related to this forward carry component are recognized in earnings in the current period. The Company generally provides for the estimated cost of hardware and software warranties in the period the related revenue is recognized. The Company assesses the adequacy of its accrued warranty liabilities and adjusts the amounts as necessary based on actual experience and changes in future estimates. The Company records deferred revenue when it receives payments in advance of the delivery of products or the performance of services. This includes amounts that have been deferred for unspecified and specified software upgrade rights and non-software services that are attached to hardware and software products. The Company sells gift cards redeemable at its retail and online stores, and also sells gift cards redeemable on iTunes Store, App Store, Mac App Store, TV App Store and iBooks Store for the purchase of digital content and software.

By October 31, 10% of the services required by the contract were completed. The company will record consulting revenue of $1,500 from this contract for October. 20) Recording expenses early overstates current-period income; recording expenses late understates current period income. 19) Recording revenues early overstates current-period income; recording revenues late understates current period income. 6) Adjusting entries result in a better matching of revenues and expenses for the period.

Tangible assets are actual physical assets, and include both current and fixed assets. If your business does experience sales cycles and the natural low period doesn’t fall on December 31st, picking a fiscal year could be well worth your while. At the end of your fiscal year, you report on your business financial situation to your shareholders, or just to yourself. You don’t have to select a tax year for you business; you can just file your first income tax return using that tax year. Free AccessFinancial Metrics ProKnow for certain you are using the right metrics in the right way. Learn the best ways to calculate, report, and explain NPV, ROI, IRR, Working Capital, Gross Margin, EPS, and 150+ more cash flow metrics and business ratios.

Therefore, although the Company has not realized any significant losses on its cash, cash equivalents and marketable securities, future fluctuations in their value could result in significant realized losses. The Company’s stock price has experienced substantial price volatility in the past and may continue to do so in the future. Additionally, the Company, the technology industry and the stock market as a whole have experienced extreme stock price and volume fluctuations that have affected stock prices in ways that may have been unrelated to these companies’ operating performance. Price volatility over a given period may cause the average price at which the Company repurchases its own stock to exceed the stock’s price at a given point in time.

• 115) On a work sheet, the adjusted balances of revenues and expenses are sorted to the Income Statement columns of the work sheet.
• The Company regularly files patent applications to protect innovations arising from its research, development and design, and is currently pursuing thousands of patent applications around the world.
• Apple Watch enables users to communicate in new ways from their wrist, track their health and fitness through activity and workout apps, and includes Siri and Apple Pay.
• We’re here to take the guesswork out of running your own business—for good.
• The current liabilities of most small businesses include accounts payable, notes payable to banks, and accrued payroll taxes.

The natural business year ends when sales activities are at their lowest point during the year. For example, the natural business year for retail merchants ends around January 31, after the Christmas holidays and the January pre-inventory selling seasons. As a result, retailers often start their annual accounting periods on February 1 of each year. National governments typically define the tax year as the 12 month period for which tax-paying companies report and pay their tax liabilities. In most cases, the required tax filing date comes a few months after the end of a calendar year, for which taxes are due. In the United States, for instance, taxpayers must file by April 15 taxes owing for the calendar year ended three and a half months earlier. D. Assuring that financial statements reflect the revenues earned and the expenses incurred.

What Is The Fiscal Year For Schools?

Every year, public companies are required to publish financial statements for review by the Securities and Exchange Commission . These documents also give investors an update on company performance compared to previous years and provide analysts with a way to understand business operations. Financial statements are published after each company’s fiscal year-end, which may vary from company to company.

What Fiscal Quarter Are We In?

For more on financial reporting statements see Income Statement, Statement of Retained Earnings, andBalance Sheet, or Statement of Changes in Financial Position. Thus, they plan spending and revenue intake to cover the time between FY year start and end. Some government groups also prepare annual plans, but two-year budgets are also standard in government. C. Adjusting entries can be used to record both accrued expenses and accrued revenues. E. Where the adjustment process is used to assign revenues to the periods in which they are earned and to match expenses with revenues. Recording revenues early overstates current-period income; recording revenues late understates current period income. Year to date refers to the period of time beginning the first day of the current calendar year or fiscal year up to the current date.

However, some current assets are more difficult to sell at full value in a hurry. The balance sheet contains details on company liabilities and owner’s equity. Intangible assets are defined as identifiable, non-monetary assets that cannot be seen, touched or physically measured. They are created through time and effort, and are identifiable as a separate asset. There are two primary forms of intangibles – legal intangibles (such as trade secrets (e. g., customer lists), copyrights, patents, and trademarks) and competitive intangibles (such as knowledge activities (know-how, knowledge), collaboration activities, leverage activities, and structural activities). The intangible asset ” goodwill ” reflects the difference between the firm’s net assets and its market value; the amount is first recorded at time of acquisition. The additional value of the firm in excess of its net assets usually reflects the company’s reputation, talent pool, and other attributes that separate it from the competition.

Revenue Is Recorded Only When Cash Is Received, And Expense Is Recorded Only When Cash Is Paid

Many of the Company’s products include third-party intellectual property, which requires licenses from those third parties. Based on past experience and industry practice, the Company believes such licenses generally can be obtained on reasonable terms. There is, however, no assurance that the necessary licenses can be obtained on acceptable terms or at all. Failure to obtain the right to use third-party intellectual property, or to use such intellectual property on commercially reasonable terms, could preclude the Company from selling certain products or otherwise have a material adverse impact on the Company’s financial condition and operating results. The Company’s products and services may experience quality problems from time to time that can result in decreased sales and operating margin and harm to the Company’s reputation. The Company must order components for its products and build inventory in advance of product announcements and shipments. Manufacturing purchase obligations typically cover forecasted component and manufacturing requirements for periods up to 150 days.

To ensure a high-quality buying experience for its products in which service and education are emphasized, the Company continues to build and improve its distribution capabilities by expanding the number of its own retail stores worldwide. The Company’s retail stores are typically located at high-traffic locations in quality shopping malls and urban shopping districts. By operating its own stores and locating them in desirable high-traffic locations the Company is better positioned to ensure a high-quality customer buying experience and attract new customers. The stores are designed to simplify and enhance the presentation and marketing of the Company’s products and related solutions. The retail stores employ experienced and knowledgeable personnel who provide product advice, service and training, and offer a wide selection of third-party hardware, software and other accessories that complement the Company’s products.

Identifies and describes transactions and events entering the accounting process . A list of all ledger accounts and includes an identification number assigned to each account . If a company is highly leveraged, this means that it has a relatively low risk of not being able to repay its debt. The higher the debt ratio, the higher risk of a company not being able to meet its obligations.