University Finance Report: Oshkosh Corporation Financial Analysis

This report offers a comprehensive financial statement analysis of Oshkosh Corporation, focusing on the first quarter results of fiscal year 2019. It delves into critical accounting principles and policies, including revenue recognition, inventory valuation (FIFO method), and the treatment of property, plant, and equipment. The analysis highlights the importance of adhering to GAAP and IFRS standards, and discusses the impact of non-disclosure of measurement and estimation bases on financial statement interpretation. The report also examines specific accounting policies related to receivables and the application of the straight-line method for depreciation. Through this analysis, the report underscores the significance of transparent financial reporting and the adherence to accounting standards for accurate financial assessment. The report also references the annual reports and first quarter results of Oshkosh Corporation, available on their investor relations website, and other resources that are publicly available.

Running head: FINANCIAL STATEMENT ANALYSIS OF OSHKOSH CORPORATION
Financial Statement Analysis of Oshkosh Corporation
Name of the Student:
Name of the University
Author Note:

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FINANCIAL STATEMENT ANALYSIS OF OSHKOSH CORPORATION
Executive summary:
This report focuses on key accounting principles and policies, which are important for
financial accounting and reporting. Accounting policies and principles are some widely
accepted accounting concepts and conventions, which are authorized by most of the
accounting regulator bodies. In this report, the fiscal 2019 first quarter result of Oshkosh
Corporation has been analyzed and critical accounting principles and policies have been
discussed.

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FINANCIAL STATEMENT ANALYSIS OF OSHKOSH CORPORATION
Table of Contents
Introduction:...............................................................................................................................3
Critical accounting policies:.......................................................................................................3
Revenue Recognition:............................................................................................................3
Distortions in financial statement and effect on forecast:..........................................................4
Effects of non-disclosure of basis of measurement and estimation:......................................4
Important Accounting policies:..................................................................................................4
Accounting for Inventory:......................................................................................................5
Receivables:...........................................................................................................................5
Property Plant and Equipment:..............................................................................................5
Conclusion:................................................................................................................................5

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FINANCIAL STATEMENT ANALYSIS OF OSHKOSH CORPORATION
Introduction:
Financial accounting and reporting in accordance with GAAP requires certain basic
accounting principles and policies to be followed for recording transaction and reporting in
the financial statement. For better understanding of the importance of accounting policies, the
first fiscal report of Oshkosh Corporation have been analyzed and importance of Accounting
Principles have been pointed out.
Oshkosh Corporation is an U.S. based manufacturer of specialty vehicles, truck
bodies and access equipment. They are one of the fortune 500 companies and they are known
for their quality and innovation (Oshkoshcorp.com 2019).
Critical accounting policies:
Accounting principles and policies are the base of disclosure of financial performance
and position of any organization. Some of the most important accounting policies can be
described as below.
Revenue Recognition:
The new accounting standard IFRS 15 aims at increasing the comparability of
financial statements of various companies (Ey.com 2019). It specifies the bases and timing of
revenue recognition for different types of companies. Form the annual report and 2019 first
quarter financial report of Oshkosh Corporation it can be observed that, the company
recognizes the revenue in their books of accounts as and when the contract terms are met or
the ownership of their products has been transferred and the customer accepts the same. They
make appropriate provision for allowances, discount and returns. They use units-of-delivery
method and cost-to-cost method for computing percentage of completion to recognize profit

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FINANCIAL STATEMENT ANALYSIS OF OSHKOSH CORPORATION
on contracts, which are in progress (Oshkosh Corporation Annual Report 2018). Their
revenue recognition policy is adequate and in accordance with IFRS and GAAP.
Distortions in financial statement and effect on forecast:
If there is any distortion in the financial statement, then the estimation and forecast
made based on such distorted financial information will lead to a complete failure. Distortion
in financial statement means non-compliance with respective accounting standards and
GAAP in preparing and presenting financial statement. Faithful representation of material
information in the financial statement is important to serve the purpose of financial statement.
Oshkosh Corporation reported their fiscal 2019 first quarter estimated financial report.
They have duly followed all the respective accounting standards and GAAP in presenting the
statement, but the only thing, which is lacking is non-disclosure of the measurement basis and
basis of their estimation (Oshkosh Corporation First Quarter Results 2019).
Effects of non-disclosure of basis of measurement and estimation:
If the basis selected by the company for estimation and measurement is not mentioned
in the financial statement, it becomes quite a difficult for the users to interpret the information
provided in the financial statement.
Important Accounting policies:
Accounting policies are some important methods and systems of accounting, which an
organization uses for recording and presenting financial transactions. Some of such important
accounting policies used by Oshkosh Corporation can be outlined briefly as below.

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FINANCIAL STATEMENT ANALYSIS OF OSHKOSH CORPORATION
Accounting for Inventory:
They consider the lower of cost or market value for inventory valuation, and they use
First-In-First-Out (FIFO) method for recording cost of goods sold (Oshkosh Corporation
Annual Report 2018).
Receivables:
All the amount billed and which are still due from the customers are included in the
receivables including profit. It also includes amount of work done and profit there on in long-
term contracts (Oshkosh Corporation Annual Report 2018).
Property Plant and Equipment:
They record property plan and equipment at their original cost and they use straight-
line method for recording depreciation on property plan and equipment (Oshkosh
Corporation Annual Report 2018).
Conclusion:
Lastly, it can be concluded that, Accounting principles are the statutory guidelines,
which specifies the treatments and disclosure requirement of financial transactions. Whereas,
accounting policies helps to comply with the accounting principles. Being a successful
company over a long time, Oshkosh Corporation is following all the relevant accounting
principles and policies, but still there are some discloser issues, which can be addressed to
improve the quality of their financial statement.

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FINANCIAL STATEMENT ANALYSIS OF OSHKOSH CORPORATION
References:
2018 Annual Report. (2018). [ebook] US: Oshkosh Corporation. Available at:
https://investor.oshkoshcorporation.com/investors/financial-information/annual-and-
quarterly-reports/default.aspx [Accessed 6 Mar. 2019].
Ey.com. (2019). [online] Available at:
https://www.ey.com/Publication/vwLUAssets/IFRS_15_The_new_revenue_recognition_stan
dard/%24FILE/IFRS15_low.pdf [Accessed 6 Mar. 2019].
Oshkosh Corporation Reports Fiscal 2019 First Quarter Results. (2019). [ebook] Available at:
https://www.sec.gov/Archives/edgar/data/775158/000077515819000005/
q12019exhibit991.htm [Accessed 6 Mar. 2019].
Oshkoshcorp.com. (2019). Severe-duty trucks by Oshkosh for defense, airport, municipal and
concrete. [online] Available at: https://www.oshkoshcorp.com [Accessed 6 Mar. 2019].