1. Choose a company from the US market.
(If you wish you can choose the company from another country, but it should be IFRS reporting available).
2. Take the most recent yearly financial statement available (called 10K report).
3. Explain how the company is doing revenue recognition. Does the company use any managerial assumptions in the revenue recognition?
4. Which method company is using to recognize bad debts? Check how allowance for bad debts changed over the last 2-3 years.
5. Which method company is using to recognize inventory? LIFO or FIFO? If a company uses LIFO, compute approximate tax savings using tax rate of 30%. In addition, compute COGS and Inventory under FIFO.
6. Check which assumptions your company is making for depreciation.
7. Make a conclusion. State any unusual assumptions you have found or summarize the main findings.