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Financial Report for Balance Plc. - Essay Example
Author : gerlachmicaela
Finance & Accounting
Pages 5 (1255 words)
To: The Financial Director – Balance plc From: The Financial Controller Date: November 29, 2012 Subject: Financial Reporting Requirements for Non-current Assets Report Executive Summary The International Accounting Standards Board (IASB) provides international financial reporting standards (IFRSs) as a basis for consistency in financial reporting as well as to enable comparison of financial statements relating to different entities…
Guidelines are provided on how certain items of fixed assets should be accounted for, the components of cost are considered, a review of the useful life of a machine, the treatment of buildings bought for business use and buildings bought for investment purposes. Introduction The method of accounting for property plant and equipment sometimes poses a problem due to uncertainties about what should be included as part of cost and what should not be included. There are different methods of accounting for changes in the life of property, plant and equipment. However, the method chosen depends on the type of asset and whether it is specific to a particular entity. Accounting for investment property also has some technicalities in terms of when the fair value model should be considered and what constitutes an investment property. Cost of acquisition and treatment in the accounts The standard which applies to property, plant and equipment generally is IAS 16 – Property, Plant and Equipment. This standard was last revised in 2012 and considers among other things definitions, measurement, disclosures, valuation, and components of costs (Deloitte 2012). ...