Favourism on one party over the other which is intentional should not exist concerning the information on financial reports. The financial statements will henceforth, provide a balanced scorecard to all the parties I relation to the effects of the transactions. b) The Board may be required to abandon neutrality and establish standards of reporting that conceals the particular transactions impact from the users of the financial reports. These costs will, however, exist regardless whether or not FASB authorizes their recognition in financial statements. It will not alter the economics of transaction and it will only withhold information from the users of the financial reports while making informed decisions and, eventually, the credibility of financial reports is impaired. c) The SEC relies on the Board and the private sector predecessors to establish and upgrade financial accounting and the reporting standards Accounting standards are therefore, established through a due process and open deliberations system to improve and certify the Board’s mission of improving financial reporting. By developing neutral accounting standards to the best interest of the public, similar transactions should be treated similarly and different transactions treated differently. This clearly shows that standard setting is in private sector in US. d) Some accounting standards are subverted so that they can achieve their purpose which is not related to fair and accurate presentation of financial statements. They there fore fail in the purpose they serve and consequently lack economic effect since they are not of importance to decision makers on allocation of resources and making other economic decisions. Problem 3(7) a) Dividends should be disclosed in changes of equity statement and in the notes as follows. Dividends that are declared are entered in the Retained Earnings account on the credit side and credited to the dividends payable account. When paid, dividends are posted to the dividends payable account in the debit side and to the Cash account, are posted to the credit side. Notes concerning the dividends can be illustrated as follows; Date Title of Account Reference Debit (Dr) Credit (Cr) 2011 June 1st Earnings Retained **** Dividends payable **** Authorized dividends Date Title of Account Reference Debit (Dr) Credit (Cr) 2011 June 1 Dividends payable **** Cash **** Authorized dividends b) The provision for a law suit should not be disclosed because the likelihood of the loss is minimal. The contingent liability that is probable and can be estimated reasonably must be reported in the balance sheet as a liability. Lawsuits are not regarded as liabilities on the balance sheet since the risk of a loss is not estimated as probable or the amount of loss cannot be quantified. When the risk of loss is at least reasonably possible, the company should provide a note. The company is consequently, a party to the legal proceeding that arises in the ordinary pursuit of its business; it is a party to legal proceedings currently, that the management honestly believes would have a material negative effect on the financial position because there is a major possibility of a loss. c) Provision on the client suffering a strike should not be made since there is no verifiable amount. The unfavourable event is likely to feature and thus the disclosure should be made in notes. d) The fire that the client suffered after closing is a non-adjusting event. There is because it is an event that occurred after the reporting period was over. These non-adjusting events should be disclosed when they are of huge importance to the users and nondisclosure would affect them when making
Financial statements information helps the users such as investors, creditors, regulators, and government, to make business and economic decisions. These financial statements should thus report an economic activity without exaggerating it so that the behaviour towards one direction can be influenced towards one direction…
FINANCIAL REPORTING AND ANALYSIS. Case 4-5 Celtics a) Amortization can be briefly defined as the allocation of the cost of the intangible assets. Lessing and residual value that has been projected to periods in which the asset is expected to contribute to the organization’s revenue generating activities estimated, capitalized cost is allocated less.
FIANANCIAL REPORTING AND ANALYSIS. Case 6-1 steel making a)Working capital=current assets –Current Liabilities $2,002.8-$734.2=$1,268.6 b) LIFO reserve account records LIFO reserve which is the difference between the values of inventory accounting cost calculated using FIFO method and the one that is calculated using LIFO method.
The other bodies governing the Hong Kong Financial reporting operates as; Hong Kong Financial Reporting Standards (HKFRS), Accounting standards (HKAS) handling the related interpretations; while the section of stock exchange works under the financial listing rules appendices 14 and 23.
Their analysis for giving loan to companies includes:
The bank for providing loan to small firms and companies would analyze many things including spreadsheets of the balance sheets and income statements for two to three historical years and two projected years as well as a pro forma balance sheet at loan closing that reflects the post-closing status.
The International Accounting Standard Board consists of a board of members who come from different countries and have a vast and wide variety of functionalities. This paper will deal with analysing the framework that has
Favourism on one party over the other which is intentional should not exist concerning the information on financial reports. The financial statements will henceforth, provide a balanced scorecard to all the parties I relation to the
NBA franchise and other intangible assets have a value of $164,703 $164702 and $165 035 in years 1996, 1997, and 1998 respectively. This shows that the method of amortisation reflect the pattern of the usage of assets in generation of income. NBA
Most countries of the European Union are using the principles of IFRS for purposes of preparing their accounting records. This is because it is a regional integration scheme which seeks to develop a common market, and hence there
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