Hewlett-Packard Article Essay Example | Topics and Well Written Essays - 500 words

Hewlett-Packard Article - Essay Example The business thrived and expanded during the leadership of Bill Hewlett at the helms but later on, under successive CEOs like John Young and then Lew Platt in 1993, it started stagnating and losing profits. The printer business was hugely successful but the company faced lot of competition from Dell which was selling customized computers at much lower prices. From 1993 to 1999, computer and printer businesses grew at compound rate of 20% and in 1999, HP formed its spin-off company Agilent Technologies comprising of its instruments and related businesses. Platt lacked strategic necessary leadership that needed to be flexible and visionary to encompass the environmental changes and adopt more aggressive creative inputs. Carly Fiorina, the dynamic young executive who had played critical role in turning the fortunes of new spinoff company of AT&T, Lucent Technologies, was made CEO of the company in 1999. Fiorina brought with a new culture of aggressive selling, merger, incentive based performance that lacked commitment and loyalty towards company. She made sweeping changes within the organization. Her motto was ‘preserve the best and reinvent the rest’. The company’s name was shortened to ‘HP’ and reduced the advertising agencies to only 2 from 43. 80 autonomous product based operating divisions into two front-end sales and marketing organization and two back-end R&D and manufacturing organizations. Revenue over profit and incentive based remuneration over salary based employment became major focus areas. Retrenchment and cost cutting was justified as means to tackle general financial downturn. During her first year, sales increased by 15% but it could not be maintained. The acquisition of Compaq computers in 2002 by HP was primarily to strengthen the capabilities in computer division which later backfired. While initially the merger was successful and it was able to maintain flagship position in computer segment but could

IAS 36 and the Framework for the preperation and presentation of Essay

IAS 36 and the Framework for the preperation and presentation of financial statements - Essay Example The carrying amount can be defined as the amount at which an asset is recognized in the balance sheet less accumulated depreciation and accumulated impairment losses. The recovery amount can be defined as the higher of an assets fair value less costs to sell (usually called net sales) and its value in use (homepage)2. The International Accounting Standards Board has prescribed the identification and conditions for assets to be impaired. Every reporting date at the end of an accounting period every organisation applying the rules of the IFRS should test if any asset is impaired. If any such asset shows that it is impaired then the organisation shall estimate the recovery amount of such asset. Other conditions attach to this test includes the test of for ``an intangible asset with an indefinite useful life or an intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test may be performed at any ti me during an annual period, provided it is performed at the same time every year. Different intangible assets may be tested for impairment at different times. However, if such an intangible asset was initially recognized during the current annual period, that intangible asset shall be tested for impairment before the end of the current annual period, test goodwill acquired in a business combination for impairment annually in accordance with paragraphs 80-99 ´Ã‚ ´3 (though the guidance on how to measure goodwill impairment should be included in Section 27, rather than referring to paragraphs 80-99 of IAS 36 Impairment of Assets)4. The IASB also add to the above rule that if an asset may be impaired by its recoverable amount should be estimated for the individual asset otherwise an organisation should determine the recoverable amount of the cash generating unit to the group where the asset belongs (the asset’s cash-generating unit)5. The measurement of the asset’s recovery amount