The Following Disclosure Note Appeared in the 2013 Annual Report

question 22

Essay

The following disclosure note appeared in the 2013 annual report to shareholders of Upton Systems Inc.
Inventories are stated at the lower of cost or market. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The Company provides inventory allowances based on excess and obsolete inventories.
Another disclosure note in the annual report stated:
The Company recorded a provision for inventory, including purchase commitments, totaling $1.40 billion during fiscal 2013, which included an additional excess inventory charge as previously discussed. This additional excess inventory charge was due to a sudden and significant decrease in demand for the Company's products and was calculated in accordance with the Company's accounting policy.
A skeptic may conclude that Upton's policy and practices threaten earnings quality. Discuss how it may do so.

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Definitions:

Non-being

The state or condition of not existing or the concept of absence, often explored in existential and philosophical contexts.

Existential Therapist

A specialist in existential therapy, focusing on helping individuals confront existential questions and issues such as meaning, choice, and death to lead more authentic lives.

Experience

The knowledge or skill acquired by observing, encountering, or undergoing events or situations.

De-reflection

A therapeutic technique aimed at diverting focus from self-concern to external tasks or others' well-being.