After reading the Harnischfeger case, I have found that Harnischfeger Corporation is a machinery one that was located in Milwaukee, Wisconsin. This company was originally a partnership in 1884 and it was later incorporated in 1910 under the name Pawling and Harnischfeger. Afterwards, its name became Harnischfeger in 1924 and it went public in 1929, which was also one on the New York Stock Exchange. Though it seemed that this company went quite smoothly over history, it had met difficulties during its running process at the same time, like the financial difficulties in 1982.

Generally speaking, the worldwide recession in the early 1980s was the major reason for the financial difficulties of this company in 1982. As a result, the high interest payments and the reduced sales led to the poor profit performance of this company so that this company reported a loss of $77 million in 1982. Luckily, this company had proposed a corporate recovery plan in order to cope with those difficulties in 1982, including changes in the top management, cost decreases so as to lower the break-even point, the business reorientation of the company, recapitalizing and restructuring debt. All of these four aspects account for a part as for why this company can deal with the financial difficulties in 1982.

As for what are the possible motives for this company’s management in making the changes to its financial reporting policies, what is a must to mention is that this company’s management would like to increase the revenues and net income of the company to the utmost. There is no doubt that all of the changes will help improve the earnings of this company in the future years as long as this company can well apply the significant accounting policies in the reality.