does it appear that campbell soup is practicing any of the reporting strategies disc 614257

Consistency and accounting changes

In 2003, Campbell Soup Company booked a special charge (reduction) to earnings totaling $31 million; the expense was a change in the way the company capitalized certain acquisition costs. These earnings numbers reported by the company for 2001, 2002, and 2003 (dollars in millions) are as follows.

2001	$649
2002	525
2003	595

REQUIRED:

a. Recalculate net income for 2003, assuming that the accounting change had not been made. Which is the more appropriate comparison—the reported amounts or the recalculated amounts? Why?

b. In what three places in Campbell Soup”s annual report would an investor be able to find a reference to this accounting change?

c. Does it appear that Campbell Soup is practicing any of the reporting strategies discussed earlier in the text? Which one and why?