Posted by & filed under Financial Accounting, Managerial Accounting.

Inventory Write-Down:

Research In Motion Ltd. will write off much of its PlayBook inventory and book a $360-million after-tax charge due to poor sales and discounting of the tablet, a move that will impact the BlackBerry maker’s financial targets.







“RIM is committed to the BlackBerry PlayBook and believes the tablet market is still in its infancy,” Lazaridis said.

The impact of poor PlayBook sales will cause RIM to miss its full-year forecast of earnings per share between $5.25 and $6, RIM said, as costs rise.

Third-quarter adjusted earnings per share are expected to come in “at the low to mid point” of $1.20 to $1.40.

RIM shares fell $1.73, or more than nine per cent, to $17.08 on the Toronto Stock Exchange.

Sales of the PlayBook haven’t been able to make a dent in the competition from Apple’s iPad or Android-based tablets.

To read more on RIM visit CBC News.

Discussion Questions:

1. Why do you think RIM sales for their playbook has declined?

2. Which product have consumers embraced?

3. The write down in inventory, will create a loss in the current year end: Is a write-down in inventory the correct thing to do?






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