The following information on Siemens AG's treatment of research and development is extracted from its 2018 financial statements. Siemens AG is an integrated technology company with activities in the fields of industry, energy and healthcare. The company is incorporated under the laws of Germany and reports using lnternational Financial Reporting Standards (IFRS).

Research and development costs-Costs of research activities are expensed as incurred. Costs of development activities are capitalized when the recognition criteria in IAS 38 are met. Capitalized development costs are stated at cost less accumulated amortization and impairment losses with an amortization period of generally three to ten years.

a. How does the reporting under rFRS differ from reporting under U.S. GAAP for research and development?

Siemens AG reports the following basic and diluted earnings per share in its 2018 annual report.

Identify the Siemens numbers that make up both EPS computations.

Based on the information in this case, provide examples for Siemens of at least four strategically required organizational outcomes, and four required workforce competencies and behaviors.

Industrial Mechanical had a contract with Free Flow Cooling, Ltd., a British company. Free Flow owed Industrial $\$ 171,974.44$ for work Industrial had performed on a construction project in Texas. Free Flow did not pay Industrial, and Industrial filed suit against Siemens Energy & Automation as a guarantor or surety on the debt. Industrial alleges that Siemens is a surety based on a fax it received from Siemens on January $27, 1994$. The fax is handwritten and states: "We have received preliminary notices and we like [sic] to point out that the contract we have signed does not allow for such action to recourse [sic] with the customer. Please advise all subcontractors and suppliers that the only recourse that they will have is against Siemens." The fax was signed "kind regards" by Arnold Schultz, Siemens's senior project manager for the Texas construction project. Nowhere in the fax did Siemens guarantee the debt of any specified entity or state that Siemens was agreeing to indemnify anyone or pay the obligations on behalf of anyone else. The fax failed to identify the principal debtor whom Siemens purportedly agreed to indemnify and failed to state that Siemens agreed to answer for that entity's debt. Can Industrial collect the amount of Free Flow's debt from Siemens? Why or why not?

Go to the website of Siemens. Download the company’s latest annual report and look at segment C, which provides details of Siemen’s financial performance. Explore which ratios are presented and how are they computed. In which way does it differ from the presentation in this chapter?

Selected income statement information for Siemens AG, a global technology company, for four fiscal years follows:

What would we expect to be the major cost categories constituting Siemens' operating expenses?

Siemens AG, a German company, is Europe’s largest engineering and electronics company. The company prepares its financial statements according to IFRS. Required: 1. Use the Internet to locate the most recent financial report for Siemens. The address is www.siemens.com. Locate the significant accounting policies disclosure note. 2. How does the company account for research and development expenditures? Does this policy differ from U.S. GAAP?

If you were a manager at Siemens, and you became aware of these activities, what would you have done?

Identify at least four strategically relevant HR policies and activities that Siemens has instituted in order to help human resource management contribute to achieving Siemens' strategic goals.

What explains the high level of corruption at Siemens? How did managers engaged in corruption rationalize it?

Selected balance sheet and income statement information from Siemens, AG, for 2015 through 2017 follows(Euro in millions).

What is your overall assessment of the company's liquidity and solvency? Explain.

Selected income statement information for Siemens AG, a global technology company, for four fiscal years follows:

Compute the missing amounts for each of the four years shown.

Your eccentric Aunt Claudia has left you $50,000 in BP shares plus$50,000 cash. Unfortunately, her will requires that the BP stock not be sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown in the table. What is the safest attainable portfolio under these restrictions?

$$\begin{array}{|c|c|c|c|c|c|c|c|} \hline & \text { BHP Billiton } & \text { Siemens } & \text { Nestlé } & \text { LVMH } & \text { Toronto Dominion Bank } & \text { Samsung } & \text { BP } \\ \hline \text { BHP Billiton } & 1.00 & 0.19 & -0.11 & 0.22 & 0.40 & 0.32 & 0.29 \\ \hline \text { Siemens } & & 1.00 & 0.32 & 0.52 & 0.42 & 0.25 & 0.20 \\ \hline \text { Nestlé } & & & 1.00 & 0.24 & 0.10 & 0.21 & 0.25 \\ \hline \text { LVMH } & & & & 1.00 & 0.07 & 0.21 & 0.13 \\ \hline \text { Toronto Dominion Bank } & & & & & 1.00 & 0.19 & 0.15 \\ \hline \text { Samsung } & & & & & & 1.00 & 0.31 \\ \hline \text { BP } & & & & & & & 1.00 \\ \hline \text { Standard deviation, \% } & 26.1 & 18.9 & 12.8 & 21.4 & 15.7 & 26.5 & 21.6 \\ \hline \end{array}$$

Siemens is one of the world’s largest electrical engineering and electronics companies. Headquartered in Germany, the company has been in business for over 160 years and operates in 190 countries. In a recent annual report, it disclosed the following information concerning its allowance for doubtful accounts (euros in millions denoted as €):

Required:

1. Record summary journal entries related to the allowance for doubtful accounts for the current year.

2. If Siemens had written off an additional €10 million of accounts receivable during the period, how would receivables, net, and net income have been affected? Explain why.