Recommendation: its advantages and disadvantages

Recommendation: its advantages and disadvantages Essay example
Masters
Essay
Finance & Accounting
Pages 4 (1004 words)
Download 0
Depreciation Name: Institution: Depreciation has been defined by scholars as the process of allocating costs of tangible assets over periods which the asset has benefitted the company (Peterson, 2002, P. 95). With time, the long-term assets of a company become obsolete while some lose value due wear and tear effects…

Introduction

Recommendations To overcome the problem of unsystematic allocation of depreciable amount over the asset’s useful life, SASB has to find a method to allocate the total amount which is to be depreciated over each accounting period in the assets useful life. This can be done by use of either of two methods which include: straight-line method or residual method. Straight-line method is applied by allocating the depreciable amount equally to the whole useful life of the asset. The company should therefore, choose a constant annual depreciation charge, usually a percentage. This will be a systematic method since at no one point will the company fail to allocate the depreciation amount. The problem of revision of residual value on the other hand can be overcome by ensuring that the amount is revised on an annual basis with the written down value of the asset being used as the base of the percentage. Application of this method also requires that qualified professionals are employed to ensure that there are no inconsistencies involved in calculation (Alexander & Archer, 2008, P. 27). To the problem of revision of the depreciation method, I would recommend that SASB does not change the method that it decides to use between the two options. ...
Download paper
Not exactly what you need?

Related papers

How the introduction of a new technology can assist an organisation in achieving its business objectives (Apple Company
Available at http:/www.itpro.co.uk/611452/timeline-a-short-history-of-the-apple-iphone 33 Rushe, D. 2011. Apple pips Exxon as world's biggest company. The Guardian. Online 9 August 2011. Available at http:/www.guardian.co.uk/business/2011/aug/09/apple-pips-exxon-as-worlds-biggest-company. [Accessed on 16 October 2011]. 35 Sinha, G. 2009. Financial Statement Analysis. New Delhi: PSI Learning…
Debt and Equity Financing - Advantages and Disadvantages
It is of great significance that the ratios must be benchmarked against a standard in order for them to possess a meaning. Keeping that into account, the comparison is usually conducted between companies portraying same business and financial risks, between industries and different time periods of the same company. The company under consideration is Marvel Toys, and in this report the analysis of…
Whole Foods Financial Recommendation
However, since then whole foods have been on the rise by achieving a margin of 4.9% by the end of 2010. Net profit margins have shown a similar trend as well as operating profits. In 2006, the industry performed well and recorded 3.63% of net profit margin. However, since then it dropped significantly and reached a low point in 2008 where it recorded a net profit margin of only 1.43%. Whole foods…
Recommendation Brief for an Internal Auditor
The author adds that an internal auditor has a crucial role to play in each and every phase of business activity. To illustrate, an internal auditor needs to go beyond financial records to obtain a deep understanding of the business operations under consideration. It is the duty of an internal auditor to review and appraise the soundness and feasibility of existing financial and other operating…
Investing in App Recommendation
Best vendors have subsidy in price though selling applications for the same devices as MEDL. From Tapjoy point of view, the applications are compatible for many users, hence many customers, hence the cost is less so as to reach all the end users. The prices are similar for the other applications from different companies (Marvin, 315). Time in existence It is worth noting that most companies…
Guillermo Furniture Store Recommendation
High tech solution is already a part of the production process of Guillermo competitor. This technology has high level of automation that reduces the labor requirement from production process and even from movement of products across assembly line. High tech solution also has computer controlled laser lathe that gives exactly the required cut on the product, thus reducing wastage. JUSTIFICATION…
Advantages and Disadvantages of Conducting Business Offshore.
Therefore, the tax reasons for offshore business are the principal factors in deciding to start the business offshore, though there are other advantages and disadvantage. Making a decision of conducting business offshore entails the motives of establishing a business for a given purpose in a country having different corporate and commercial laws. In fact, there are alternatives allowing solutions…