ABSTRACT
Students reasonably assume that financial reporting provides useful insights into financial performance. Alaska Gold is an instructional case that is based on a disguised real-world company, where reported GAAP-based financial statements obfuscate the firm’s underlying economics. The Company mined gold for its first two years of operations but reported zero gold revenue for each of these years because it did not sell any. In the third year, the Company sold all of the gold mined to date—and reported gold revenue and related cost of gold sold. Students use publicly available data to prepare an alternative analysis that unveils the economics of what really happened to Alaska Gold in each of the three years 2017–2019. The situation helps students appreciate that accounting rules, business models, managerial discretion, and economic context are important to understanding and evaluating financial performance.
