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2 pages/β‰ˆ550 words
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APA
Subject:
Accounting, Finance, SPSS
Type:
Case Study
Language:
English (U.S.)
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Topic:

Starbucks: Accounting for Employee Compensation

Case Study Instructions:

My company is Starbucks: every student should develop throughout the course the analysis of the respective topic from the designated company; First you need to describe the most important aspect from the topic of the week that is directly related with your company YOU NEED TO READ THE MATERIAL OF THE WEEK IN THIS CASE FOR WEEK 9 IS ACCOUNTING FOR EMPLOYEES COMP, you need to mention briefly the main idea of the topic YOU MUST RESUME THE MOST IMPORTANT IDEAS FROM THE TOPIC. Then for your company report you should include every component and explanations from the last 3 years related specifically for the topic of the week. AGAIN LAST 3 YEARS. HERE READING THE 10K SEC REPORT YOU ARE GOING TO SEE HOW DOES WORK THE TOPIC INSIDE YOUR COMPANY, YOU MUST EXTRACT THAT INFORMATION FOR YOUR WEEKLY REPORT. According with the Course Schedule Table we have every week one new topic, from the last 3 years 10K SEC Report you should make one report every week for that particular topic extracted from your company. The Requisites for the report are as follows, minimum two pages, Single Space, Font Size 10, no spaces between paragraphs, 1 inch margin and font Times New Roman. Here is briefly what I expect from your weekly company report, the description of the weekly topic, the description of what is or how is related with your company and why is so important, then bring the operational process, how the company describe that particular topic from the last 3 years. For more information about your company, visit www(dot)finance(dot)yahoo(dot)com then type your Ticker Company, then go Company section and click SEC FILLINGS after that click the 10K SEC REPORT or ANNUAL REPORT

Case Study Sample Content Preview:
Starbucks case study: Accounting for Employee compensation
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Starbucks (SBUX) is a coffeehouse chain business mainly operating in the North America market, Europe and Asia. In accounting for compensation there is a need to determine benefits that accrue to an employee through pension retirement plans. The pension plans can either be defined contribution plans of defined benefit plans. In the defined contribution plan, employers make defined contributions which are managed by a third party trustee, and it is through proper management that employees receive the right compensation. The defined benefit plans take into account specified retirement income based on an employee’s salary. The projected benefit obligation to employees is the main focus of pension accounting focusing on the present value of future benefits accrued to employees depending on payments, period of employment and expected changes in salary. For the financial periods 2011 to 2013, the defined contribution plans will take into account the fixed annual contribution in Starbucks. However, like in other organizations using the defined contribution plan, employees typically control the investment accounts, and they also have the opportunity to control their investment accounts.
Accounting for compensation in 2011
In 2011, the company maintained stock-based compensation for employees with various equity incentive plans for employees, consultants and non-director employees. Additionally, the company maintained employee stock purchase plans (ESPP), while the restricted stock units (RSUs) equivalent to non-invested shares. The evaluation of the stock units is dependent on fair value of stock awards, services stocks while, the fair value of restricted stock units was calculated based on stock price of grant. Under the equity based compensation plan, Starbucks issued 32.7 million common shares while 8.5 million shares were issued under ESPP. Similarly, there were expenses related to the compensation plans with $ 60.4 million for options and $ 84.8 million for RSUs (Yahoo, 2014).
In accounting for the Stock Options Plans, there is an exercise of equal installments while also using the fair value of options since the options were granted in 2009. The employees were given the option to exchange underwater options with lower exercise price options. To record the compensation expenses related to the stock options, Starbucks takes into account future expectations and historical experience. Furthermore, historical experience helped to estimate the expected value of option, as expected employee behavior affects the expected terms. This is important to the topic of accounting for compensation as it highlight on the trading options and stock options of the company and how the fair value estimate affects accounting for options.
Starbucks has also used the Management Deferred Compensation Plan MDCP, and accounting records for the item took into account the equity security price risk. This is an important aspect for the company because the approximated amount is recorded as a liability, while the accrued compensation and related costs are aggregated for the year under the consolidated balance sheets. Similarly, the investment...
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