PLEASE ANSWER THESE QUESTIONS SEPERATELY Table of Contents Table of Contents 2 SECTION A 3 a.Usefulness of financial statements in decision making process 3 b.Fundamental properties of reporting information identified by the IASB Framework 4 SECTION B 6 a.Liability as Regards to IASB Framework 6 b.Recognition Criteria under IASB Framework 7 c.Disclosure of absence of earthquake insurance by a company 7 References 9 SECTION A a…
include a systematic representation of all the financial transactions carried on by an organization. These financial transactions are first identified, recorded and then communicated to the interested users in the form of financial statements. The users can be either internal managers of the organization or the outsiders like the stakeholders of the company (Kimmel, 2011, p.5-6). Out of many uses of these financial statements to its users, decision making is one of its most crucial aspects. Interpretation and financial analysis of these financial statements facilitates decision making process of a company. Business organizations have to take so many vital decisions on a regular basis. These strategic decisions, whether it is long term or short term, can either make or break a company. A company’s future is dependent the soundness and efficacy of the financial statements. Now in order to facilitate decision making, the financial statements prepared must exhibit relevant information required by the managers to interpret and come to a decision. It includes information regarding relevant costs and revenues associated with it. A few examples of some vital decisions taken by an organization, requiring specific relevant information are as follows: Whether to make or to buy: Whether it is better to make the product within the company or whether it should be bought from outside by sub-contracting it to some other company is more often or not are to be decided upon the internal managers of the company. This often requires a comparative study of the relevant costs that are likely to be incurred in both the alternatives to come to the most cost effective decision. These costs data are provided by financial statements of an organization. Whether to increase output or sales: In order to decide whether to increase output or not, again a comparative study of the additional costs involved and the additional revenue that can be generated is required. This will give the estimate of the profits involved to help taking the decision. Decision to set up a new production line: Feasibility or viability of taking such investment decision requires projected figures of the running costs involved including the investments that would be required as well as the cash flows generated. These are all part of preparing financial statements that reflects these crucial financial elements of a business organization. Decision to put a hold or completely close down a business activity: This again requires information regarding avoidable costs and unavoidable costs involved in order to facilitate the management to take such decision which can only be analyzed through detailed financial statements of an organization (Bendrey, M, Hussey, R. & West, 2003, p.4-8). Thus, financial statements hold the key to various strategic decisions taken by business concerns in order to successfully run the business. b. Fundamental properties of reporting information identified by the IASB Framework The International Accounting Standards Board (IASB) Framework, also known as Conceptual Framework provides information and guidelines that are to be maintained while preparing and presenting financial statements. The standards that are set out contains information regarding concepts about objectives of financial stateme ...
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“Financial and Accounting Questions Essay Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.net/finance-accounting/58657-please-answear-these-questions-separatly.
However, with businesses becoming international, the distinction between domestic and foreign stakeholders should be resolved. This can only be possible if uniformity can be introduced in existing accounting standard.
1b. Whether the country is a creditor or debtor nation, it is important that financial data are consistent irrespective of the balance of trade. As companies become more global, it is important that accounting standards be applied. From a debtor’s perspective, it is important that investors are confident that the financial condition of a company or a national bond is expressed accurately.
A conceptual framework is developed from the existing theories. Based upon this an exploratory research is done and along with the subjective belief on the concerned topic a conceptual framework is made by the researcher. Several theoretical frameworks are made after the financial crisis of 1929 and also after the recent financial crisis.
In the final accounts, it is an expenditure that is deducted from the revenue. Deprecation shows the amount of decrease in the past worth of assets. Stakeholders can review this data and identify when to purchase substitute assets for the organization. For instance, an industry frequently replaces its manufacturing equipment at some time throughout its operations.
6 Information needed by Management Accountant (MA) 6 B. 7 Information needed by Financial Accountant (FA) 7 C. 8 Satisfying the needs of each accountant 8 References 9 9 9 Introduction Accounting Information System is a set of process and individual activities which a company uses to collect and transfer financial information between various departments.
This aspect of accounting concerns itself with learning about the effect an organisation has on society and about its relationships with an entire range of stakeholders to whom it is accountable. These would include all those groups who affect and/or are affected by the organisation and its activities.
In effect the three issues are conjoined within this theoretical approach. Political Economy Theory questions the supposed neutrality of corporate reports both regulated and unregulated. According to Howieson (2004), Political Economy Theory recognises the existing system of corporate reporting and "subjects to critical scrutiny those issues.
Some express comfort knowing that the theories have evolved from a systemic line of problem solving since the early 1800's, while others embrace the fact that scientific method and practical application has played a huge role in developing a more consistent baseline in latter years.
In toto, he owns 30 + 15 = 45% of the total voting rights in S1.
Scenario 2 :H owns 30 % of the voting shares in S1 through indirect holding through S. Moreover, he also holds 75% of 25% i.e. 18 % through his indirect holdings in S2 .Therefore, his total holdings is 30 + 18 = 48% of the voting shares in S1.