Blackberry 10

Mary Gillett; Morgan Hart

Product #:9B15B008_P

Supplier:Ivey

Discipline:Accounting

Setting:Canada, 2014

Details:Case (PDF) • 10 pages • 2015-08-21 (Rev: 2017-11-15)

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In 2014, a well-reputed innovative technology company had introduced a new operating system and two new smartphone devices with the goal of turning around the company’s slumping hardware sales. Despite positive product reviews in the media, the models did not sell as well as expected. Consequently, the lower demand led to impairment of inventory and supply commitments at various times throughout the following fiscal year. At the end of the fiscal year, the task facing the company’s chief financial officer was deciding whether or not further impairment was required. Because this decision came at a time of significant uncertainty about the company’s future in the competitive marketplace, the task also involved considering the impact of a potential adjustment on the company’s financial statements and on shareholder confidence.

Learning Objectives

This case is suitable for undergraduate and graduate level courses on financial accounting, financial analysis of accounting and business strategy.

To introduce the concept of inventory valuation and impairment.
To examine the potential effect of impairment charges on the financial statements.
To analyze financial reporting required of dual-listed companies under the accounting frameworks of International Financial Reporting Standards and U.S. Generally Accepted Accounting Principles.
To discuss business strategies for competing in the dynamic marketing landscape of the smartphone industry.

Blackberry 10

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Learning Objectives