walden Current Trends in Accounting ACCT6140Standards Essay

Delineating Related Intel Pentium Accounting Research Questions Sami Mansour Walden University Current Trends in Accounting ACCT6140Standards May 17, 2015 Delineating Related Intel Pentium Accounting Research Questions Introduction The purpose of this paper is to define research questions (below) relating to Accounting for the Intel Pentium Chip Flaw (Hawkins, Miller Narayanan, 2009). The questions are as follows; (A3.1) If you were an accountant for Intel, what specifically would be the relevant accounting research question with respect to the Intel Pentium chip flaw? (A3.2) What constrains Intels decisions about how to account for the Pentium chip flaw? (A3.3) What do you need to know, estimate, and assume to answer the†¦show more content†¦They ignored to claim the default to avoid the financial effect The accounting constraint of materiality would indicate that this item could be recorded as an expense (more expedient) since it is not material enough to influence the decision of a reasonably prudent creditor or investor(Weygand, 2009). Intel is always constrained by agreements/ contracts with their lenders to pay from retained earnings. Dividend is usually distributed to the owners in term profits . Intel may be constrained by the requirements of other obligations of generally accepted accounting principles (GAAP). Estimations and Assumptions to the Research Question Accountants need to estimate the magnitude of the problem. Intel should use the management function such as planning, controlling and directing the solution toward the problem. It is a quantities analysis that needs measurement, facts, and common sense. The accountant always suggests mathematical models based on statistics such as confident level, mean, variance, and correlation ration R-square (Weygandt, 2009). Intel might consider contingent theory to estimate a certain event of error. It is probability of occurrence. The FAS 5; accounting for contingencies is defined as an existing event/situation or group/set of events involving some kind of uncertainty which may result in a gain or loss. This will be resolved when future circumstances/event fail to take place/occur. Resolution may result in loss of an asset (Financial