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Faeyee Electronics was an electronics company that manufactured and sold smartphones including XS and XT types. The management of Faeyee wanted to pursue the maximum contribution margin as much as possible, especially since they were faced with limited resources. It was necessary to apply analytical tools and cost accounting concepts to study this case including cost-volume-profit analysis, learning curve analysis, regression analysis, definitions of competitive products, constrained non-linear optimization, and contribution margin.

The case uses business analytics tools and cost accounting concepts, including regression models and constrained optimization approaches, to study how to maximize business outcomes, such as contribution margin and profits when limited business resources are available. The company and individuals are disguised.

This case can be used in any junior-, senior-, masters- or MBA-level managerial accounting course. Students need to have at least one course of introduction to statistics or instructors review required statistics concepts or techniques before assigning this case. Students are exposed to the challenges of deriving learning curve models, using regression analysis to study collected data and allocating limited resources to maximize contribution margin.

Financial reporting.

Postgraduate (honours and masters in financial reporting).

Transnet is the utility company responsible for, inter alia, the operation, construction and management of South Africa's fuel pipeline infrastructure. The company is wholly owned by the South African Government and prepares its financial statements in compliance with International Financial Reporting Standards (IFRS). One of Transnet's capital projects involves the construction of an upgraded multi-fuel pipeline. The expected costs of construction ballooned from ZAR12.6 billion (approximately USD120 million) to ZAR24 billion (approximately USD240 million) over a five-year period. This has raised questions about the prudential management of the company's capital projects and the basis on which the government subsidises Transnet's capital costs. The significant increase in project costs also begs the question: how should the cost of the self-constructed pipeline be accounted for in Transnet's annual financial statements?

Describe and explain the qualitative characteristics of useful information in terms of the Conceptual Framework (2010) and summarise the framework's key principles. Evaluate these principles, drawing connections between them and the relevant academic theory (as per the prescribed readings), with specific reference to the accounting for self-constructed plant and equipment.

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CSS 1: Accounting and Finance

The case is appropriate for courses in financial accounting and reporting, audit and assurance, forensic accounting, accounting practice and regulations and corporate governance. After studying the case, students should be able to explain the concept of control and power under IFRS; explain the concept of economic; discuss audit committee and external auditor independence issues and ways to strengthen auditor’s independence; assess the usefulness of the new extended audit report; and evaluate the role of gatekeepers such as financial analysts, audit committee, external auditor, institutional investors and regulators in enhancing the quality of financial reporting.

This case focuses on the accounting policy choices of the foreign associates of AirAsia Berhad. AirAsia Berhad is a phenomenal success, from a debt laden company to having been voted as World’s Best Low-Cost Airline in the annual World Airline Survey by Skytrax for eight consecutive years from 2009 to 2016 and the World’s Leading Low-Cost Airline in the annual World Travel Awards for four consecutive years from 2013 to 2016. In June 2015, an analyst report was leaked, and it led to heated discussion and exchanges in the market. The report questioned the non-consolidation of AirAsia Berhad associates. The share market also reacted. Various players in the market came into foray with their statements and opinions on the merit of the accounting policy choice by AirAsia Berhad. Whose views actually reflect the nature of accounting policy choice that is true and fair? Are these gatekeepers attesting to the accounting crux of substance over form?

Senior undergraduates; MBA; EMBA

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CSS: 1: Accounting and Finance

This case uses agency theory and decision usefulness approach to justify whether the change in accounting standard from IAS 17 Leases to IFRS 16 Leases favourably or adversely affects AirAsia’s financial reporting.

This case was written based on secondary data contained in industry reports, company annual reports, company websites, news reports and accounting standards. The case has been classroom-tested with undergraduate students taking advanced financial accounting and reporting module.

AirAsia Group Berhad (AirAsia), a Malaysian multinational low-cost carrier, was required to adopt IFRS 16 Leases (equivalent to MFRS 16 Leases), effective from 1 January 2019. The new standard, superseding IAS 17 Leases, was expected to provide investors and creditors with a richer insight into AirAsia’s leasing transactions and financial situations. In view of AirAsia having a substantial fleet of leased aircraft, the adoption of IFRS 16 Leases would change the way AirAsia had to report its borrowings which could subsequently have an impact on its bottom line. Thus, this case requires students to examine the financial implications of adopting IFRS 16 Leases by AirAsia and to determine whether the change in accounting standard favourably or adversely affects AirAsia’s financial reporting.

This case is intended for use in intermediate and advanced financial accounting and reporting modules at the undergraduate level.

The teaching case is designed to be used by students in higher education institutions at the undergraduate level. This case may also be relevant for staff at the bursary departments of any public universities or public organizations that have biological assets.

This case provides a study on agricultural activity at Universiti Pengurusan Malaysia (UNIPM). The purpose of this case is to create greater awareness for case users on the accounting framework and on methods recommended for recording specific assets in agricultural activity, i.e., biological assets. This case provides users with experience in explaining the nature of an organization’s agricultural activities and accounting for biological assets as recommended in the Malaysian accounting framework. In addition, users are exposed to some current issues in accounting standards, such as ethical issues. In this case, Fakhrul, an accountant at UNIPM and a leader of the Asset Unit, was responsible for reporting the value of all UNIPM’s assets, including biological assets. He was instructed to accurately recognize, measure, and disclose the value of biological assets according to the appropriate accounting standard. Furthermore, UNIPM had been urged to replace the existing accounting standard of the Malaysian Private Entity Reporting Standard (MPERS) with the Malaysian Public Sector Accounting Standard (MPSAS). Fakhrul was considering how to account for and report biological assets according to the new MPSAS. This case is a decision making or ‘unfinished’ case which is suitable for financial accounting and reporting courses. The names of the people and the university are fictitious, but the details were based on actual events. A series of interviews were conducted with the key players to gather the data. Other useful documents such as the university’s annual report, university’s website and the deer reports were also referred.

The primary objective of this teaching case is to provide an opportunity for case users to understand both the accounting framework and the methods recommended for recording specific assets in agricultural activity. More specifically, the teaching objectives of this case are to achieve the following learning outcomes: to identify the relevant accounting standard for recognizing, measuring, reporting, and disclosing biological assets by public universities in Malaysia, to apply the appropriate accounting treatment in recognizing, measuring, reporting, and disclosing biological assets in accordance with the appropriate accounting standard for public universities in Malaysia and to understand the ethical issues involved in deer valuation methods.

Teaching notes are available for educators only.

CSS 1: Accounting and finance.

To evaluate Thomas Cook’s financial condition, students deploy financial analysis techniques including comparative analysis. The role of financial reporting in impressions management is considered in two respects: firstly, the use of separately disclosed items by companies; and secondly, the treatment of goodwill on acquisition.

The case draws on a range of public data from Annual Reports and secondary sources including the Department of Business Energy and Industrial Strategy investigation into the failure of Thomas Cook.

Thomas Cook Group plc’s (Thomas Cook) was one of the oldest travel firms, yet its apparently sudden failure on 23 September 2019 left 600,000 holidaymakers stranded and sparked the largest ever peacetime repatriation of British citizens at cost of £83m to the Department of Transport. Around 9,000 employees who had expected to be paid on 30 September were left unpaid.Could CEO Peter Frankhauser have addressed the challenges faced by Thomas Cook more effectively during his tenure or was the company locked into a flightpath to failure? The case highlights the importance of context when performing financial analysis and encourages students to evaluate the challenges posed by the current standards related to accounting for goodwill and corporate reporting of underlying performance.

This case can be used in undergraduate financial reporting and current issues in accounting courses/modules at the postgraduate level.

After completion of the case study, the students will be able to understand the calculation of cost of individual sources of funds and cost of capital, examine various tools such as economic value added and cash value added analyses which help determining whether a company has added value to its shareholders or not and explore the application of Benford’s law and the Beneish M-score in detecting manipulation of numbers in financial statements.

Nimmy Jacob, a newly recruited research analyst with an equity research firm, was entrusted with tracking the “auto ancillary industry”, specifically “Minda Corporation Ltd” (MIL). MIL was a leading diversified auto components manufacturing companies in India. The company’s share price meteorically rose during February 2021–2022 (Figure 1). The company’s turnover over the past few years had grown at a compounded annual growth rate of 15% during the three preceding years. The company had in the recent past bought a 15% stake in another competitor, Pricol Ltd, for a consideration of INR 400 crores and previously had used joint ventures and acquisitions to scale up its operations. Jacob, apart from the conventional financial analysis, had to ascertain whether all the strategic decisions were adding value to the shareholders’ investments by exploring the various tools available for the same and also calculate the minimum expected rate of return for MIL. Jacob was apprehensive about the financial statements, although the numbers for the company were good. Jacob was skeptical about a high-growth company having the incentive to manipulate its earnings. Manipulations could be in the form of abnormal increase in accruals, inconsistency in expenses and high days of receivables. Therefore, Jacobs used certain analytics/statistical tools to detect any manipulation of numbers in the financial statements of the company and to ascertain apt findings about the company.

This case study is intended for discussion in corporate finance, financial reporting and analysis and financial analytics at Master of Business Administration/undergraduate level.

Teaching notes are available for educators only.

CSS1: Accounting and finance

We obtained information on China Gerui from secondary published sources, including annual reports downloaded from the Securities and Exchange Commission’s (SEC) EDGAR database, news sites and newspapers, the company’s website and journal articles. One of the authors visited the China Gerui plant in Henan, China.

China Gerui, a Chinese metal fabrication company, enjoyed exponential growth because of its location, product innovation and ability to move up the value chain. At the height of its success, the company listed on the Nasdaq and had plans to raise capital to fund ambitious expansion plans. Unfortunately, four years after listing on Nasdaq, the company received a letter from the listing qualifications department notifying China Gerui that they were not in compliance with Nasdaq’s filing requirements because it had not filed its Form 20-F. Now, the company had only five days to decide whether to request an appeal of the letter.

This case is best suited for higher-level undergraduate accounting and finance courses such as intermediate accounting, auditing, international accounting, financial statement analysis, corporate finance and investments analysis. It is especially appropriate for graduate-level global accounting and advanced financial statement analysis courses. In these courses, the best placement is after coverage of SEC regulations and requirements for financial statement reporting and disclosure. Moreover, the case may be used as a tool to demonstrate the step-by-step process for searching and retrieving information from a public company’s filings through the SEC’s EDGAR database.

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The case presents a financing dilemma at a fast growing, Brazilian construction company. The growing demand for residential and commercial real estate in Brazil, coupled with the capital intensive nature of the industry generates the need for a considerable external financing. The students are invited to take the perspective of the financial manager and evaluate three financing alternatives – an issue of debentures, a seasoned equity offering, and a capital-raising ADR offering. In their evaluation and final recommendation students need to consider the implications of each of the financing alternatives on firm value, equity risk, cost of capital, financial leverage, issuance costs, and ownership structure. The case also presents a valuable opportunity to discuss the interdependence between the institutional development of an economy and the development of its capital markets.

This study enables to critique the development of a sustainability strategy brand; integrated reports, sustainability reports, usage of safe internet and online learning skills to reduce inequalities and increase stakeholders’ values.

Digi Telecommunications (Digi) has been publishing annual sustainability reporting in line with Global Reporting Initiatives since 2009. Albern Murty, Chief Executive Officer (CEO) of Digi, the largest player in the mobile telecommunications industry in Malaysia by the number of subscribers, decided to establish a responsible business brand known as Yellow Heart in 2018 to better serve their stakeholders demand. There was a low stakeholder understanding of Digi’s sustainability efforts and societal impacts. Digi’s Sustainability department aspired to make Yellow Heart the best industry practice for continuous improvements by making Responsible Business commitment one of the main pillars of the company’s strategy and vision. Yellow Heart was linked to Sustainable Development Goals (SDG)10 on reducing inequalities by focusing on Digital Inclusion and Resilience to increase safe access opportunities, provide marginalized communities with opportunities to pursue interests in digital learning pathways and create a more sustainable digital future for all. The case study illustrates the sustainability management at Digi and the planned migration from sustainability reporting to integrated reporting to build trust in the business with all the stakeholders. The case dilemma involves the challenges that Philip Ling Oon Hun, the Head of the Sustainability, faced in deciding the SDGs to focus on and measuring and reporting their outcomes to contribute to the greater good, not only in pure business terms but also to society at large.

This case is appropriate for undergraduate or graduate-level programs in Accounting, Corporate Governance and Strategy Implementation.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.