Obtain Starbucks's 2013 annual report either using the "Investor Relations" portion of its web site (do a Web search for Starbucks investor relations) or go to wwwsec.gov and click "Search for company filings" under "Filings and Forms (EDGAR)."
Required:
1. Which depreciation method does Starbucks use? Why do you think Starbucks selected this method?
2. What are the useful lives of the various chsses of Starbudcs's property, plant, and equipment?
3. a. Does Starbucks report all of its depreciation expense in a single line item on its income statement?
b. What amount did Starbucks report as depreciation and amortization for 2013, 2012 and 2011? Do these amounts result in an increase to cash?
4. a. What amount does Starbucks report for impairment and disposition losses for 2013, 2012, and 2011? Where are impairment and disposition losses reported?
b. What is the conceptual justification for Starbucks's combination of impairment and disposition losses?
c. With regard to impairments, how does Starbucks measure fair value, and how would this measurement be classified in the fair value hierarchy (Level 1,2, or 3)?