Obtain Starbucks’s 2017 annual report either using the “Investor Relations” portion of its web site (do a Web search for Starbucks investor relations) or go to http://www.sec.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 classes of Starbucks’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 2017, 2016, and 2015? Do these amounts result in an increase to cash?
4. a. What amount does Starbucks report for impairment and disposition losses
for 2017, 2016, and 2015? 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)?