All accountants should be somewhat familiar with the U.S. Securities and Exchange Commission's (SEC) website: U.S. Securities and Exchange Commission. Access and explore the site a bit, but the section we are going to be using in this case is the Filings tab. Click on that tab; you can investigate the various options under Filings, the one we need is Search for Company Filings. Click on that, then click on the first option under EDGAR Search Tools: Company or Fund Name.... and search for Pepsico in the Company Name box. A list of the SEC filings that Pepsico, Inc. has made should come up, beginning with the most recent filings. Scroll down that list until you find the 10-K (annual report) for the year ended December 26, 2015. The Documents view will give you the entire 10-K, the Interactive Data view will primarily give you the financial statements, which includes the footnotes. There are several sections to the 10-K document. You will need to locate the financial statements. If you are using the Documents view, they begin on page 73 with the Consolidated Statement of Income. You should be able to scroll through that income statement, along with the Consolidated Statement of Comprehensive Income, Consolidated Statement of Cash Flows, Consolidated Balance Sheet and the Consolidated Statement of Equity. Immediately following those statements are the Notes to Consolidated Financial Statements. If you are using the Documents view, be sure that you are in the actual financial statement and Notes to Consolidated Financial Statements section, not in the preceding Management's Discussion and Analysis section. Assume that you are employed by an accounting firm that is preparing a report for R.J. Smith, a client that is considering a substantial investment in Pepsico, Inc. Your contribution to this report is to document the accounting changes, estimates and error corrections Pepsico may have made in the fiscal years ended 2015, 2014 and 2013. Prepare your report by:
1. Including a list of the numbers and names of the various Notes to Consolidated Financial Statements.
2. Read all of the footnotes with the goal of finding as many references as possible to accounting changes, estimates and error corrections. Report your findings by copying and pasting the specific sections of the footnotes that relate to those items. Do not copy the entire footnote and be sure to cite the copied sections properly, including which specific note the material came from.
3. Some of your copied sections will be very clear and easy for a layman to understand, but restate in your own words any referenced sections that contain more technical language. Keep in mind that the primary purpose of this report is to help your client quickly understand the accounting changes, estimates used and any errors Pepsico may have had in this time frame.
4. Identify any of your findings that were required to be accounted for retrospectively. Do note that consolidated investments are accounted for under the equity method; you may find a brief review of Appendix 22A helpful. Also include where you would find any retrospective change in the actual financial statements.