Toy Central-Accounting Issues

Finance & Accounting
Pages 4 (1004 words)
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Toy central financial information should be confirmed to adhere to the generally acceptable accounting principles alongside the value estimates made by the companies’ management.


Performance sustainability of Toy Central Corporation in the Toy industry largely depends on risks involved with corporate governance. The company is considering the improvement of its corporate governance to ensure that the financial scandals it had experienced would never be repeated.
The presentation of financial statements should disclose transactions for related parties, accounting policies of the organization, and conflicts of interest between Troy Central Corporation and the transacting parties. The periodic financial statements need to be reviewed to ascertain adherence and enable the necessary revisions in the organization with respect to corporate requirements. Capitalized costs or licensing fees of Toy Central Corporation should be expensed when incurred considering the fact that assets are used up. Expenses are considered as money flowing out and liabilities are being incurred. The costs are incurred in the process of manufacturing toys, carrying out other company’s activities that involve the ongoing central operations and offering other related services.
Amortization of costs over the life of a contract is appropriate, since Toy Central Corporation is an ongoing business. It is only acceptable for a period of not more than sixty months after the commencement of the business, the period of investigation of the probability for a new business that is being started. ...
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