...Accounting Reporting Criteria The world of accounting can look quite universal to any outsider. Most people assume that when you are dealing with money and business that everyone follows the same standards regardless of where the company is located. This is not the case when dealing with companies in different companies that do not utilize the US GAAP. While there are some aspects that may be similar there are many differences between these types of companies and how they perform different accounting transactions. Regulatory Environment The regulatory environments in the United States and the International business community have some very distinct differences that make them very unique. In the United States due to major corporate scandals that have occurred in the past, such as Enron, have brought about some major changes with regard to corporate governance. “The US Government passed the Sarbanes-Oxley Act of 2002 which, among other things, set out specific guidelines for the behavior of directors of boards and senior management” (2008,p.2). The Sarbanes-Oxley Act was created to set specific standards that all companies would have to abide by. This act also created an “oversight board titled the Public Accounting Oversight Board (PCAOB) was established to serve as a regulator of the accounting firms that audit public companies” (2008, p.2). The Security and Exchange Commission monitors the PCAOB and maintains changes and updates to the Sarbanes-Oxley Act. These boards...
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...FINANCIAL ACCOUNTING & REPORTING LECTURE 1: Link Between Business and Accounting Dr. Namasivayam Lecture 1 1 LEARNING OBJECTIVES 1. Define accounting & explain why accounting information is important. 2. Identify users of accounting information. 3. Explain the contents of the 3 basic financial statements. 3. Explain the relationship between accounting equation and the balance sheet. 5. Analyse business transactions using the accounting equation. Lecture 1 2 WHAT IS ACCOUNTING? It is the way business people set goals, measure results, evaluate performance, and communicate results to various users. Lecture 1 3 ACCOUNTING LINKS … Lecture 1 4 USERS OF ACCOUNTING INFORMATION • Managers • Potential buyers • Trade creditors • Employees • Customers • Tax inspectors • Business owners • Potential partners • Bank institutions • Competitors • Auditors • Society Lecture 1 5 SHORT EXERCISES You as user of accounting information: i. Identify several ways in which you currently use accounting information in your life as a student or individual. ii. Identify several situations in which you might be required to supply financial information about yourself to others. Lecture 1 6 FINANCIAL STATEMENTS A quantitative report which describes the financial health of a business. This includes: An Income Statement; A Balance Sheet; A Cash Flow Statement. Lecture 1 7 THE...
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...Financial Accounting and Reporting March 2015 Maldives Business School Cover Page ASSIGNMENT BRIEF BTEC HND/Associate Degree in Business (Management/HR/Marketing) The student must fill the relevant parts of the following table. Student Date Student First Name Student Last Name ID Task No. submitted Date issued Mohamed 1 8th March 2015 Statement of authenticity I, the above named student, hereby confirm that this assignment is my own work and not copied or plagiarized. It has not previously been submitted as part of any assessment. All the sources, from which information has been obtained for this assignment, have been referenced in the Harvard format. I further confirm that I have read and understood the Maldives Business School rules and regulations about plagiarism and copying and agree to be bound by them. Assignment summary information Unit 10 Financial Accounting & Reporting Unit Assignment reference 1 Assignment type This is an individual assignment. Task Submit on Do on Task 1: LO1, LO3, LO4, M1, M2, D1, D2, D3: Report 11 April 2015 NA Task 2: LO2, M3: Class assessment NA 23 March 2015 An extension must be applied for in writing by individual students and will only be granted Extensions for valid reasons. Late submissions Late submissions will be marked for all grades but will incur a fine of MVR 500. Assessor(s): Internal verifier: Assessor(s) please fill the table below AFTER the evaluation. Assessment Feedback ...
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...Accounting in Action 3-5 Financial Accounting and Reporting AC501-01NA July 20, 2010 Accounting in Action 3-5 a) Name at least two advantages to Chieftain from having no long-term debt. Can you think of disadvantages? a. One advantage is that the company is more solvent. When a company carries a high level of long-term debt relative to assets, it has a lower solvency than a similar company with a low level of long-term debt. Companies with higher debt are relatively more risky, because they will need more of their assets to meet these fixed obligations. Another advantage is that the company has a short-term liquidity ratio. This ratio indicates whether the company will have the resources to pay its current and maturing obligations. Since the company has no long-term debt, it has more resources to pay obligations. A disadvantage is that if the company has no long-term debt, it does not have any long-term investments. When a company invests in securities, such as bonds, common stock, or long-term notes, the company is anticipating its long-term life. For example, bonds are a long term debt that are cashable at a certain point in time; if a company has bonds, the company will have expected cash in the future. b) What are some advantages to Chieftain from having this large cash balance? What is the disadvantage? b. One of the advantages is that the company has a high liquidity, and does not necessarily need to pay on account when pursuing transactions...
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...Accounting Reporting Criteria When financial mishaps such as the Tyco and Enron scandals came to light; it was evident that the Government needed to step in to ensure that corporations were reporting their finances accurately and honestly. For this reason Congress passed the Sarbanes Oxley Act (SOx) in 2002. The Act details the requirements for financial reporting for public corporations and is overseen by the Securities and Exchange Commission. The Sarbanes Oxley Act requires all publically traded corporations to follow strict requirements for financial accounting and reporting. Boeing and Airbus are the two leading rival builders of aircraft, and they do not follow the same regulations for internal controls. One of the reasons for these differences is due to the fact that Boeing in a domestic corporation and Airbus is an international corporation. For the purpose of this paper, Team E will compare and contrast regulatory environment, issues with foreign currency, and the differences in GAAP of the two corporations. The Boeing Company takes its regulatory governance very seriously and the company has worked very hard to meet the challenge of SOx compliance. In order to ensure the company is SOx compliant, Boeing has employed significant resources. One of these resources is the Corporate Audit organization. Corporate Audit is responsible for reviewing the internal control system to assure that all organizations are achieving the regulatory objectives and that the system is...
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...BKAF3063: FINANCIAL ACCOUNTING AND REPORTING III (A132) TUTORIAL 1: ACCOUNTING FOR LEASES DUE DATE: 2/3/2013 BEFORE 12.00PM QUESTION 1: On 1 January 2013 Ayman Bhd. entered into a lease agreement to lease machine from Harry Bhd. The terms of the agreement included: (i) non-cancellable lease term of nine years, with an option to buy the machine at the end of lease term for RM7,000; (ii) lease rental of RM34,000 per year to be paid semiannually by Ayman Bhd. on 1 July and 1 January each year of the nine years; and (iii) the lease rental was calculated and mutually agreed upon based on 8% rate of return to Harry Bhd. The machine is expected to have an estimated useful life of 10 ten years. Both companies use the straight line method to depreciate all of their fixed assets. REQUIRED: (Round up the figures to the nearest RM) (a) Compute the minimum lease payments and the present value of the minimum lease payments for Ayman Bhd. (3 Marks) (b) Show relevant journal entries for Ayman Bhd and Harry Bhd on 1 January 2013 and 31 December 2013. (7 Marks) Table 2: Periods (n) | Present value of 1 | Present value of an ordinary annuity of 1 | Present value of an annuity due of 1 | | 4% | 8% | 4% | 8% | 4% | 8% | 5 | 0.82193 | 0.68058 | 4.45182 | 3.99271 | 4...
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...Accounting Policies for Reporting Income Accounting Policies for Reporting Income Dana Ferretti ACC 303 Dr. M. Austin Zekeri Intermediate Accounting 1 November 20, 2011 Accounting Policies for Reporting Income GAAP (Generally Accepted Accounting Principles) refers to a common set of standards and procedures that companies follow to present their income and expenses, assets and liabilities of their financial statements. The FASB (Financial Accounting Standards Board) is the major operating organization that establishes and improves the rules of GAAP reporting. GAAP demands companies to disclose their accounting policies in their financial reports. The authoritative literature provided by the FASB, determines the classifications of comprehensive income and net income. Accounting policies are a group of specific policies that consist of principles, rules, and procedures that a company must follow when preparing and reporting its’ financial statements. These policies should include measurement systems, methods, and procedures for presenting disclosures. Accounting policies also include matters such as; depreciation methods, consolidation of accounts, inventory pricing, goodwill, and research and development costs. When these disclosures are presented, it assists the financial users and readers a better interpretation of the company’s financial status. [FASB 235-10-50] The authoritative literature of the FASB Accounting Standards...
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...The SANGEA Accounting and Reporting System By: Henry Smith Accounting 3000 Table of Contents 1. Introduction Pg: 1 2. Background Pg: 2 3. History Pg: 2 4. Conventional Systems vs. SANGEA System Models Pg: 3 5. GAAP and iGAAP Pg: 4 6. How to Use SANGEA Pg: 5 7. Users of SANGEA Pg: 5 8. My Opinions Pg: 6-7 9. Appendices and Work Cited Pg: 8-22 Introduction Mostly everything in the business world has a system they use to collect and report inventory. “SANGEA, an automated, electronic data management information system, is owned by API [American Petroleum Institute] and was designed to assist petroleum companies with estimating, managing and reporting greenhouse gas (GHG) [Greenhouse Gas] emissions.”1 This system covers the accounting and reporting of six greenhouse gases by the Kyoto Protocol such as: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6). The actual idea is quite simple with the following objectives in mind: to help companies prepare a GHG inventory that represents a true and fair account of their emissions, through the use of standardized approaches and principles, to simplify and reduce the costs of compiling a GHG inventory, to provide business with information that can be used to build an effective strategy to manage and reduce GHG emissions, and to increase consistency and transparency...
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... Auditing and accounting principles in the United States of America are considered strong and sophisticated. Transparency and disclosure are really emphasized in American companies, and because of this the downfall of Andersen and Enron still raises questions. This has since become a case of reference in review of issues concerning financial reporting and auditing. It has also been used to explain about regulations on auditing and accounting inside and outside America. This case has brought about huge implications on corporate governance to other countries. Enron Corporation declared its bankruptcy in the year 2001. Afterwards, Anderson’s downfall occurred in 2002. It has been a big question, outside America, on what brought about this failure. The General Accepted Accounts Principles, in the US, are very well developed. These principles require clear disclosures of financial statements that are audited. They also require an established federal agency and a commission to monitor financial reporting. Cases have been written, from the failures of Enron and Andersen, for the exploration of accounting, auditing and financial reporting issues in the US. The head of auditing of Enron Corporation was fired during the company’s downfall for destroying important documents, upon realizing that the company’s accounting methods were being investigated by the commission of Securities and Exchange. The destruction of the accounting documents compromised with accounting standard principles...
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...Corporate Financial Accounting and Reporting Tim Sutton second edition Corporate Financial Accounting and Reporting We work with leading authors to develop the strongest educational materials in business and finance, bringing cutting-edge thinking and best learning practice to a global market. Under a range of well-known imprints, including Financial Times Prentice Hall, we craft high quality print and electronic publications which help readers to understand and apply their content, whether studying or at work. To find out more about the complete range of our publishing please visit us on the World Wide Web at: www.pearsoned.co.uk Corporate Financial Accounting and Reporting Second Edition Tim Sutton Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsoned.co.uk First published 2000 Second edition published 2004 © Financial Times Management 2000 © Pearson Education Limited 2004 The right of Timothy G. Sutton to be identified as author of this work has been asserted by him in accordance with the Copyright, Designs, and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the United...
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...MEMORANDUM October 7, 2012 TO: Susan Rogers, CFO FROM: Mehal Patel, Staff Accountant SUBJECT: Reporting of Comprehensive Income This memo is in response to your questions regarding the reporting of comprehensive income on the financial statements of the Lennon Company. Comprehensive Income Comprehensive Income includes Net Income and Other Comprehensive Income. Purpose of reporting comprehensive income is to “report a measure of all changes in equity of an entity that result from recognized transactions and other economic events of the period other than transactions with owners in their capacity as owners.” Other Comprehensive Income (OCI) and impact on balance sheet OCI includes revenue, expenses, gains and losses that change shareholders’ equity but are not included in net income. OCI is reported in the balance sheet under shareholders equity as accumulated other comprehensive income (AOCI: a cumulative presentation of OCI period over period). AOCI is shown separate from retained earnings and additional paid in capital. The following items are considered as OCI (net of tax): (a) Net unrealized holdings gains (losses) on available-for-sale (AFS). (b) Debt securities transferred from held to maturity (HTM) to AFS. (c) Portion of other-than-temporary impairments (OTTI) for debt securities held as AFS or HTM not recognized in earnings. (d) Subsequent decrease (if not OTTI) or increase in fair value of AFS securities previously...
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...financial statements would preserve and strengthen the company’s global financial competitiveness. Moreover, it will simplify the accounting and consolidation process significantly and reduce financial reporting costs. 2) What potential effect would arise if Klugen were to select the option under IFRS 3 to value non-controlling interest at the proportionate share of its subsidiaries’ net identifiable assets? For business combination, the buyer can control without buying all of the equity, the remaining , so-called the non-controlling, equity interests are measure either at fair value or at the non-controlling interests’ proportionate share of its subsidiaries’ net identifiable assets. Under IFRS 3, the potential effect would arise is that it will result in benefits for users by improving comparability and will increase the relevance of information provided. Moreover, it identifies and evaluates the main costs and benefits for users. 3) Do you believe that an impairment of goodwill would be more likely under IFRS or under U.S. GAAP? Why or why not? There is a difference in goodwill impairment measurement. Under U.S GAAP, two-step approach is used. It looks to the reporting unit. However, under IFRS, one-step approach is used. It is based on the value in use and it looks to the cash-generating unit. The cash-generating unit is smaller than reporting unit and leads to more impairment of goodwill. I believe that an impairment of goodwill would be more likely under IFRS. Under...
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...“Why Governmental Accounting and Financial Reporting is—And Should Be—Different” The paper “Why Governmental Accounting and Financial Reporting is—And Should Be—Different” compares governmental accounting and financial reporting to that of the approach used in for-profit business enterprises. It also states specific reasons why governments should be different. There are environmental differences between governments and businesses that call for a different approach. First, governments have different purposes for their operations. For-profit entities strive to create wealth and to meet return on investment goals. While governments on the other hand are actually trying to enhance or maintain quality of life with services that are dictated by public policy goals. They also must consider efficiency, effectiveness, and economy when they evaluate public policy. Secondly, governments and for-profit business entities differ in the way they generate revenue. Governments generate income through involuntary taxes. Customers of for-profit business entities have a choice of what services they purchase and where they buy. The same does not apply for the governmental customer. The users of their reports also differ. Citizens and their elected representatives are users of government reports. They are as interested in the “why” as they are the “how much” when they read a financial report. They use governmental financial reporting to support their discussions of public policy such as what...
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...Implications and Consequences: +Provides an opportunity for earnings management. + Reflect the current period’s true and fair results. -Requirements for annual impairment testing of goodwill and other non-amortised intangible assets. -Difficulties surrounding the identification of a cash-generating unit. -Challenges in projecting cash flows and estimating various assumptions for the testing of value in use. Kolb’s TEL with Paul’s Critical Thinking Components: IAS 36 Impairment of assets-assess of key features Objects/Events: To prescribe the procedures that an entity applies to ensure that its assets are carried at no more than their recoverable amount. An asset is carried at more than its recoverable amount if its carrying amount exceeds the amount to be recovered through use or sale of the asset. If this is the case, the asset is described as impaired and the Standard requires the entity to recognise an impairment loss. To also specifies when an entity should reverse an impairment loss and prescribes disclosures. (IASC Foundation Education) Worldviews: Institutional Investor: likely to know the long term stability of business by reviewing the current true worth of assets. Standard Setters: To ensure that assets are carried at no more than their recoverable amount, and to define how recoverable amount is determined. (Deloitte Touche Tohmatsu, 2009) Assertions: Option2 =the reversal of an impairment loss...
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...Uncertain Supply Chain Management 2 (2014) 61–72 Contents lists available at GrowingScience Uncertain Supply Chain Management homepage: www.GrowingScience.com/uscm Sustainable accounting reporting practices of Indian cement industry: An exploratory study Shagufta Khana , Vineet Chouhanb*, Bibhas Chandrac and Shubham Goswamib a Research Scholar, School of Management, Sir Padampat Singhania University, Udaipur-India Assistant Professor, School of Management, Sir Padampat Singhania University, Bhatewar, Udaipur-India, 313601 c Associate Professor, School of Management, Sir Padampat Singhania University, Bhatewar, Udaipur-India, 313601 b CHRONICLE Article history: Received September 10, 2013 Received in revised format 10 December 2013 Accepted February 25 2014 Available online February 27 2014 Keywords: Cement Industry Sustainability Financial Information Environment Accounting Reporting Sustainable Reporting Practices ABSTRACT Cement is the single most important and profitable product in the building material sector. With the economic boom, in India, Indian cement industry is a market of opportunities waiting to be tapped. However, at the same time cement industry is also experiencing a surge in demand. Production of Cement will always release carbon dioxide and change in the climate of the earth that is why despite its profitability, the cement industry faces many challenges regarding environmental concerns and sustainability issues. In order to minimize the impact of all...
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