International Accounting and MNC'S: Consolidated Financial Statements

4/13/2020 International accounting
and MNC’s
Consolidated financial statements
Submitted to:
Miss Mariam Hina
Submitted by:
Habiba Kausar
Kainat Jahangir
Hafsa Khalid
Department:
Commerce
Semester:
8th
Fatima Jinnah women university
Rawalpindi
Alphabet Inc.
Consolidated financial statement
As of December 31st 2018
Introduction:
Alphabet Inc. is an American multinational conglomerate headquartered in Mountain View,

California. It was created through a restructuring of Google on October 2, 2015, and became the
parent company of Google and several former Google subsidiaries. The two founders of Google
assumed executive roles in the new company, with Larry Page serving as CEO and Sergey Brin
as president. Alphabet is the world's fourth-largest technology company by revenue and one of
the world's most valuable companies. The establishment of Alphabet was prompted by a desire
to make the core Google business "cleaner and more accountable" while allowing greater
autonomy to group companies that operate in businesses other than Internet services.
Type Public
Industry Conglomerate
Founded October 2, 2015; 4 years ago

Founders Larry Page
Sergey Brin
Headquarters Googleplex,
Mountain View, California,
US
Area served Worldwide
Products Technology
Revenue US$161.857 billion (2019)
US$136.819 billion (2018)
Operating income US$34.23 billion (2019)
Net income US$34.34 billion (2019)
Total assets US$275.9 billion (2019)
Total equity US$201.4 billion (2019)
Number of employees 118,899 (2019)
Subsidiaries Calico
CapitalG
DeepMind
Google
Google Fiber
GV
Loon
Sidewalk Labs
Verily
Waymo
WingX
Information about Segments

This business is operated in multiple operating segments. Google is the only reportable segment.
None of our other segments meet the quantitative thresholds to qualify as reportable segments;
therefore, the other operating segments are combined and disclosed as Other Bets.
Reported segments are:
 Google – Google includes main products such as Ads, Android, Chrome, Google
Cloud, Google Maps, Google Play, Hardware (including Nest), Search, and
YouTube. Our technical infrastructure is also included in Google. Google generates
revenues primarily from advertising; sales of apps, in-app purchases, and digital
content products, and hardware; and licensing and service fees, including fees
received for Google Cloud offerings.
 Other Bets – Other Bets is a combination of multiple operating segments that are not
individually material. Other Bets includes businesses such as Access, Calico,
CapitalG, GV, Verily, Waymo, and X. Revenues from the Other Bets are derived
primarily through the sales of internet and TV services through Access as well as
licensing and R&D services through Verily.
Account receivables:
Millions($)
Accounts receivable, net of allowance of $674 and $729 20,838
Accounts Receivable are recorded at the invoiced amount. An allowance is maintained for
doubtful accounts to reserve for potentially uncollectible receivables. Accounts receivable are
reviewed by amounts due by customers which are past due to identify specific customers with
known disputes or collectability issues. In determining the amount of the reserve, judgments are
made about the creditworthiness of significant customers based on ongoing credit evaluations. A
sales allowance is also maintained to reserve for potential credits issued to customers. The
amount of the reserve is determined based on historical credits issued.
Account payables:
Millions ($)
Trade notes and account payables 2,918
Others (short-term employee debt and accrued expenses) 1,460
Total 4,378
Trade payables and others trade payable due within and after 12 months are the financial
liabilities measured at amortized cost.
Good will:
Changes in the carrying amount of goodwill for the years ended 2018 were as follows (in
millions):
Google ($) Other bets ($) Total consolidated ($)
Balance as of December 31, 2017 16,295 452 16,747

Acquisitions 1,227 0 1,227
Transfers 80 (80) 0
Foreign currency translation and (81) (5) (86)

other adjustments
Balance as of December 31, 2018 17,521 367 17,888
Intangible assets:
Information regarding purchased intangible assets were as follows (in millions):
gross carrying Accumulated Net carrying

amount ($) amortization ($) value ($)
Patents and developed technology 5,125 3,394 1,731
Customer relationship 349 308 41
Trade names and others 703 255 448
Total 6,177 3,957 2,220
Patents and developed technology, customer relationships, and trade names and other have
weighted-average remaining useful lives of 3.0 years, 0.5 years, and 3.8 years, respectively.
As of December 31, 2018, expected amortization expense relating to purchased intangible assets
for each of the next five years and thereafter is as follows (in millions):
($)
2019 712
2020 585
2021 533
2022 201
2023 7
Thereafter 182
Total 2,220
Provisions:
Purchase Obligations
As of December 31, 2018, $7.4 billion of other non-cancelable contractual obligations, primarily
related to data center operations and build-outs, digital media content licensing, and purchases of
inventory.
Indemnifications
As of December 31, 2018, the business did not have any material indemnification claims that
were probable or reasonably possible.
Legal Matters
Antitrust Investigations:
The Comision Nacional de Defensa de la Competencia in Argentina, the Competition
Commission of India (CCI), Brazil's Administrative Council for Economic Defense (CADE),
and the Korean Fair Trade Commission have also opened investigations into certain of our
business practices. In November 2016, we responded to the CCI Director General's report with
interim findings of competition law infringements regarding search and ads. On February 8,
2018, the CCI issued its final decision, including a fine of approximately $21 million, finding no
violation of competition law infringement on most of the issues it investigated, but finding
violations, including in the display of the “flights unit” in search results, and a contractual
provision in certain direct search intermediation agreements. We have appealed the CCI
decision. The fine was accrued for in 2018.
Other
This business regularly subject to claims, suits, regulatory and government investigations, and
other proceedings involving competition (such as the pending EC investigations described
above), intellectual property, privacy, tax and related compliance, labor and employment,
commercial disputes, content generated by users, goods and services offered by advertisers or
publishers using our platforms, personal injury, consumer protection, and other matters. Such
claims, suits, regulatory and government investigations, and other proceedings could result in
fines, civil or criminal penalties, or other adverse consequences.

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4/13/2020 International accounting

Consolidated financial statement

As of December 31st 2018

Alphabet Inc. is an American multinational conglomerate headquartered in Mountain View,

Founded October 2, 2015; 4 years ago

Information about Segments

Reported segments are:

Accounts receivable, net of allowance of $674 and $729 20,838

Google ($) Other bets ($) Total consolidated ($)

Balance as of December 31, 2017 16,295 452 16,747

Foreign currency translation and (81) (5) (86)

Information regarding purchased intangible assets were as follows (in millions):

gross carrying Accumulated Net carrying

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