Whirlybird, Inc. offers helicopter tours and transportation in major cities arou
ID: 2618728 • Letter: W
Question
Whirlybird, Inc. offers helicopter tours and transportation in major cities around the world. The company is considering a stock repurchase in the upcoming quarter. As the Chief Financial Officer (CFO), you understand there are several methods to reduce quarterly earnings, which could reduce stock price prior to the announcement of the proposed stock repurchase.
What course of action do you recommend to the Chief Executive Officer (CEO) of Whirlybird?
If the CEO approached you recommending a reduction in current quarter earnings, how would you respond?
Explanation / Answer
Change depreciation method or increase depreciation
Change inventory accounting method from FIFO to LIFO in inflationary environment
Defer revenue recognition
Defer recognition of other income
Recognise expenses earlier
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