Starbucks: Venti Leases

The paper depicts a financial analyst trying to make sense of Starbucks' finances and drawing from recent projects of the IASB/FASB to identify lease accounting as a key issue for the firm. The case creates an understanding of the importance of having a full picture of the company's obligations in understanding its overall performance.

In reviewing the case students examine Starbuck's extensive use of leases and use spreadsheet tools to understand the full extent of the corporation's indebtedness. Although heavy users of leases, including Starbucks, had argued that lease accounting would be cost prohibitive and complex, an estimation of lease indebtedness can be created using relatively simple tools that can be well understood by students.

The case allows high level accounting standards related issues to be drilled down to the individual level, using a well known company with which students identify to illustrate real world consequences of accounting policy choices.