StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Financial Accounting - Essay Example

Cite this document
Summary
Instructor Date: Financial Reporting and Accounting: Part 1 The following represents Chamber’s Consolidated Income Statement showing the profit made by the consolidated entity and the amount relating to minority interest. Chamber plc and Subsidiary Consolidated Income Statement For the Year Ended 30 June 2012   ?…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER97.3% of users find it useful
Financial Accounting
Read Text Preview

Extract of sample "Financial Accounting"

Download file to see previous pages

Turnover 21,134 Cost of sales 15,345 Gross profit 5,735 Distribution costs 2,520 Administrative expenses 1,417 Operating profit 1,798 Investment income 80 Finance costs 11 Profit before taxation 1,867 Taxation 581 Profit after taxation 1,286     Profit attributable to:   Parent 1,206 Non-controlling interest 80   1,286     A consolidation schedule is provided Appendix 1. It shows how the figures for turnover, cost of sales and gross profit were arrived at. The Statement below represents the Consolidated Statement of Financial Position of Chambers and Subsidiary for the period ending 2012.

The relevant calculations are shown. . In fact, internally generated goodwill cannot be recognised as an asset while goodwill that has been acquired is recognised as an asset (IFRS.org 2012a). If a self constructed asset is constructed to be used in the business it is treated in the same manner as an acquired asset. However, self constructed assets which are produced for sale as part of the normal activities of a business are dealt with under IAS 2 Inventories. The two assets are not quite comparable as one set is something you can see and touch physically while the other is not.

However, there is no reason why goodwill that is internally generated should not be recognised as an asset. Goodwill is something that a business generates internally, although it can only be recognised when someone acquires it. We are all aware that when a business is sold goodwill is the excess over the fair value of the separable assets that the buyer/acquirer is willing to pay. The fact that someone is willing to pay for it means that they have placed a value on it. That value could be anything and the fact that someone places a value on it and is willing to pay means that it is measurable – whether objectively or subjectively.

Casta et al (2011) indicates that some of the models that have been created to value internally generated goodwill cannot explain how goodwill was created. However, the fact that we know from the definition that goodwill arises from the reputation that has been built up a business over time means that the creation of goodwill can be explained. There are also other factors such as the area in which the business is located; the employees as it relates to their experience, competence, efficiency and reliability; and a host of other factors (Wood and Sangster

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Financial Accounting Essay Example | Topics and Well Written Essays - 1250 words”, n.d.)
Financial Accounting Essay Example | Topics and Well Written Essays - 1250 words. Retrieved from https://studentshare.org/finance-accounting/1463144-financial-accounting
(Financial Accounting Essay Example | Topics and Well Written Essays - 1250 Words)
Financial Accounting Essay Example | Topics and Well Written Essays - 1250 Words. https://studentshare.org/finance-accounting/1463144-financial-accounting.
“Financial Accounting Essay Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.org/finance-accounting/1463144-financial-accounting.
  • Cited: 0 times

CHECK THESE SAMPLES OF Financial Accounting

Financial Accounting Theory

Financial Accounting Theory Contents Contents 1 Introduction 2 Conceptual framework 3 Financial Accounting 4 Conceptual Framework for Financial Accounting 5 Conclusion 7 Reference 8 Introduction Conceptual framework is the concepts and ideas which is coherent and organized that justifies a research.... The paper is an attempt to analyze that the conceptual frameworks of Financial Accounting are really useful or it is just a time wasting activity....
6 Pages (1500 words) Essay

Financial Accounting Theory Issues

Financial Accounting Theory 1.... What is the purpose of Financial Accounting theory?... The purpose of Financial Accounting theory is broad and complex, spanning an array of issues.... hellip; One of the most overarching perspectives is that Financial Accounting theory allows for deliberations and insights to be developed regarding more effective and efficient accounting practices.... Explain why you think regulation of Financial Accounting is needed or not needed....
12 Pages (3000 words) Essay

Unified Financial Accounting Standards

Unified Financial Accounting Standards It is arguably true that the modern business world experience numerous business operations and relevant assessment measures that determine the success of such operations in the competitive world.... Unified Financial Accounting Standards Indeed, since the modern business takes place in a global market, there is absolute need to define how to do business across all nations (Ingram, & Albright, 2007).... Financial Accounting standards are some of the measures, which all companies must comply with while doing business, assessing their progress, and reporting their success....
5 Pages (1250 words) Essay

Apple Financial Accounting

diligently and blindly implements all statement of Financial Accounting standards.... is firm in its stand to classify and account for revenues in accordance with statement of Financial Accounting standards no.... is a business force that must be studied in order not to be caught in the quagmire of computer and accounting ignorance. Paragraph no.... KPMG continues its management advisory services and other related accounting services to Apple....
5 Pages (1250 words) Case Study

Financial Accounting and reporting

Financial Accounting and reporting relates to the process of summarizing, recording and issuing a report of a number of transactions arising from business operations in form of financial statements with an aim of presenting a true picture of its financial level and performance.... The sole objective f Financial Accounting and reporting is the preparation of financial statements such as the income statement, cash flow statement, fixed assets movement schedule and the balance sheet (MAYNARD, 2013, 309)....
4 Pages (1000 words) Essay

Financial Accounting Reports

Financial Accounting on the other hand is the process of bookkeeping but the production and display is done in reports and for the use by the public outside of… The major distinction between Financial Accounting and managerial accounting is that while the purpose of Financial Accounting is the provision of information to people outside the organisation, the purpose of managerial accounting is meant to help managers make Financial Accounting as a process mainly produces three types of reports: These statements are produced according to the Generally Accepted Accounting Principles (GAAP) either quarterly or annually....
4 Pages (1000 words) Essay

Financial Accounting Reports

Also known as, financial accountancy, the aspect of Financial Accounting generally entails an accountancy field that deals with financial statements preparations for decision makers including suppliers, stockholders, banks, owners, government agencies, employees and different… In the same field, the aspect of financial capital maintenance is mostly measured in terms of constant purchasing power units or nominal monetary units.... The most essential need for engaging in Financial Accounting is to assist in the reduction of This is mostly done by measuring and monitoring the performance of agents....
4 Pages (1000 words) Assignment

Financial Accounting Theory

This assignment "Financial Accounting Theory" presents concepts that require that the financial information disclosed during reporting should be useful to all stakeholders.... Although Finance and accounting theories advocate for the usefulness of information by making financial statements easier to understand, that is not the case.... hellip; According to the Elephant article, Cowperthwaite (2014) suggests that an auditor provides financial reports to shareholders and other investors so that they could make investment decisions....
1 Pages (250 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us