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How to account for the pentium chip flaw 

Database research strategies include defining the research necessary to answer the research question. Consider the article "Accounting for the Intel Pentium Chip Flaw" (Miller and Narayanan, 2001).

If you were an accountant for Intel, what specifically would be the relevant accounting research question with respect to the Intel Pentium chip flaw?

  1. What constrains Intel's decisions about how to account for the Pentium chip flaw?
  2. What do you need to know, estimate, and assume to answer the research question?
  3. What would you recommend to Intel management with respect to accounting for the Intel Pentium chip flaw? Why? 

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How to account for the Pentium chip flaw.

Answer : When the reverse engineering department tests the product, it is mandatory or compulsory to do blind analysis for the minimum bias of the results and according to the assumptions suppose the customer is following the appropriate electronic commerce practices and implementing the appropriate controls, it can be assumed or considered that its activities are reliable in nature.
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Interpretation or Inference-since this assurance service falls under the domain of consulting services, the practitioner would follow consulting standards in conducting the review and reporting on the reliability of the activities (Weirich, Pearson & Churyk, 2010). Implications or consequences-if activities are not reliable, the practitioner will so state in the report (Financial Accounting Standards Board, 1975).

Database research strategies include defining the research necessary to answer the research question. Consider the article "Accounting for the Intel Pentium Chip Flaw" (Miller and Narayanan, 2001).

If you were an accountant for Intel, what specifically would be the relevant accounting research question with respect to the Intel Pentium chip flaw?

1. What constrains Intel's decisions about how to account for the Pentium chip flaw?

Answer : Being an accountant for Intel, the most challenging question in our brain will be accounting for the lack of technology costs of chips. In the IT industry, technology ends rapidly, so depreciation / depletion methods do not follow the right and fair accounting for such sharp technology degradation. Therefore, there will be need to develop a new method of amortization of the cost of chips development (patent). The method must be flexible according to the decreasing speed of the patent.

2. What do you need to know, estimate, and assume to answer the research question?

Answer : For a research problem, we need to study the subject matter of research and the facts and figures related to the project. It may be possible that sometimes we need to make some guesses, such as the life of the project and the expected revenue and expenditure.While analyzing a research problem, it is also necessary to make some assumptions. There may be estimates regarding the conditions of the project such as favorable weather / political conditions etc.

3. What would you recommend to Intel management with respect to accounting for the Intel Pentium chip flaw? Why?

Answer : Intel Pentium Chip is a patent for Intel. And so Intel's management must follow patent accounting for the Intel Pentium Chip. The patent should be recognized at its cost and it should be amortized during the useful life. A patent is an intangible asset that arises due to intellectual property, and also has a limited life. Because of obsolescence, or because of the introduction of new chip technology, this technique will not have any significance, so Intel should modify the patent.

 

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