Some analysts applauded the shift in strategy that the Autonomy purchase signaled for HP. In the fall of 2011, Hewlett-Packard (HP) purchased Autonomy Corporation (Autonomy), a British software leader in processing, managing, and delivering unstructured information for real-time analysis. However, analysis of the financial statements and related footnote disclosures reveal that this $8.8 billion was less than half the $18 billion total impairment that HP recorded in 2012. The HP disclosure emphasized the Autonomy acquisition (which occurred prior to Whitman's tenure as CEO) and accused Lynch and Autonomy executives of cooking the books to inflate the purchase price. Shortly after, HP announced an impairment charge of $8.8 billion related to the Autonomy acquisition, driving the company to report a loss for the year, the first in 10 years. For the next few quarters, Autonomy missed expected results, and by May 2012, HP removed Autonomy's CEO Michael Lynch. The board replaced HP CEO Leo Apotheker with Meg Whitman. From there, events at HP suggested a sense of division and frustration between HP leadership, the board, and Autonomy executives. Others were unsure how Autonomy's cloud computing software fit HP's businesses.
While the case focuses on the accounting for mergers and acquisitions, it also provides for a variety of other discussion topics such as the effect of managerial incentives and CEO succession on accounting outcomes, managerial “spin” on disclosure of bad news, strategy in changing institutional environments, and financial reporting limitations of new economy firms with heavy investments in intangible assets.The case opens during the fall of 2011 (when HP purchased Autonomy). Note: We do not offer technical support for developing or debugging scripted downloading processes.Written using public sources, this case uses Hewlett-Packard's (HP) purchase of Autonomy Corporation (Autonomy) to analyze the accounting treatment for the acquisition and subsequent goodwill impairment. Note that this policy may change as the SEC manages SEC.gov to ensure that the website performs efficiently and remains available to all users. This SEC practice is designed to limit excessive automated searches on SEC.gov and is not intended or expected to impact individuals browsing the SEC.gov website. Once the rate of requests has dropped below the threshold for 10 minutes, the user may resume accessing content on SEC.gov. If a user or application submits more than 10 requests per second, further requests from the IP address(es) may be limited for a brief period. Current guidelines limit users to a total of no more than 10 requests per second, regardless of the number of machines used to submit requests. We reserve the right to block IP addresses that submit excessive requests. To ensure our website performs well for all users, the SEC monitors the frequency of requests for SEC.gov content to ensure automated searches do not impact the ability of others to access SEC.gov content. Unauthorized attempts to upload information and/or change information on any portion of this site are strictly prohibited and are subject to prosecution under the Computer Fraud and Abuse Act of 1986 and the National Information Infrastructure Protection Act of 1996 (see Title 18 U.S.C. For security purposes, and to ensure that the public service remains available to users, this government computer system employs programs to monitor network traffic to identify unauthorized attempts to upload or change information or to otherwise cause damage, including attempts to deny service to users. More Information Internet Security Policyīy using this site, you are agreeing to security monitoring and auditing. For more information, contact more information, please see the SEC’s Web Site Privacy and Security Policy. You can also sign up for email updates on the SEC open data program, including best practices that make it more efficient to download data, and SEC.gov enhancements that may impact scripted downloading processes. Please declare your traffic by updating your user agent to include company specific information.įor best practices on efficiently downloading information from SEC.gov, including the latest EDGAR filings, visit sec.gov/developer. Your request has been identified as part of a network of automated tools outside of the acceptable policy and will be managed until action is taken to declare your traffic. To allow for equitable access to all users, SEC reserves the right to limit requests originating from undeclared automated tools. Your Request Originates from an Undeclared Automated Tool
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