...1 Luca Pacioli: Father Of Modern Accounting ...................................................................................... 2 1.2 19th Century – The Beginnings of Modern Accounting in Europe and America ............................... 3 1.3 20th Century – The Development of Modern Accounting Standards................................................. 4 1.4 21st Century – Accounting Regulation in Modern Commerce ........................................................... 4 2. DEVELOPMENT OF ACCOUNTING .................................................................................. 4 3. EVOLUTION OF ACCOUNTING ......................................................................................... 5 4. THE CONSEQUENCE OF DOUBLE ENTRY ..................................................................... 6 5. RECENT GROWTHS AND DEVELOPMENTS IN ACCOUNTING ............................... 7 6. LOOKING TO THE FUTURE ............................................................................................... 8 REFERENCES .............................................................................................................................. 9 1. INTRODUCTION The main objective of this study is to critically review the Origin, Growth and Development of accounting theories and their impacts on financial reporting. Other objectives are to explore accounting theory in resolving areas of diversities among users of financial statements. It further examines...
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... Abstract The purpose of this paper is to look at FASB Interpretation No. 36, Accounting for Exploratory Wells in Progress at the End of a Period-an interpretation of FASB Statement No. 19. This paper will cover what is discussed, how the authority was found, what industry is affected, and what are the major organizational parts of that authority. FASB Interpretations are published by the Financial Accounting Standards Board (FASB). The interpretations extend or explain standards that have been published. They are part of the U.S. GAAP and there are currently 48 interpretations that have been published as of September 2006. In this paper we will look at FASB Interpretation No. 36 Accounting for Exploratory Wells in Progress at the End of a Period an interpretation of FASB Statement No. 19. Statement 19 specifies that companies should follow the successful efforts method of accounting for costs of acquiring, exploring, and developing mineral resources. It also specifies how capitalized costs should be amortized and addresses accounting for mineral property conveyances. Also addressed are the disclosure to be included in financial statements and accounting for income taxes. (fasb.org/summary/stsum19.shtml) Interpretation No. 36 addresses the questions that have been raised as to when to expense the costs of an exploratory well in progress that has been determined to be dry before the financial statements for that period have been issued. FASB requires that all costs of expletory...
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...GASB and FASB Analysis Paper ACC/460 The Governmental Accounting Standards Board and the Financial Accounting Standards Boards were put in place to assist in regulating the private sector, federal, and state and local governments. These regulations that are in place are to hold he sector accountable for its accurate financial reporting and documentation. I ask how these two divisions differ in its objectives and how to they regulate each party it governs. The Governmental Accounting Standards Board oversees the federal, state, and local governments with the basis of accountability. With that the GASB holds the government accountable to the citizens it represents. This means the government entities must show its constituents the money being raised is going to exactly what it was claimed for. An example of this would be a raise in taxes to assist in making gasoline safer for the environment. The GASB has broken down this accountability into three sub-objectives, the first is interperiod equity. Interperiod equity is a means of financial reporting that determines if there is enough current year money to pay for the current year needs. It also explains whether or not individuals in need of certain governmental services were pushed to the taxpayers. The second sub-objective is budgetary and fiscal compliance meaning that this reporting explains where funds came from to take care of services needed by the citizens. The third and final us service effort costs and accomplishments...
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...CHAPTER 1 Governmental and Nonprofit Accounting: ENVIRONMENT AND CHARACTERISTICS ANSWERS TO QUESTIONS QUESTION 1-1 a. The similarities of accounting for profit-seeking and G&NP organizations include: 1. Double-entry system of accounts. 2. Most accounting mechanics, e.g., basic transaction documents, journals, ledgers, charts of accounts. 3. Where a G&NP organization has a business-type activity, e.g., a municipal electric utility, the accounting largely parallels that for a similar private business (e.g., electric utility). b. Among the unique aspects of G&NP organization accounting are: 1. Fund accounting—designed to separate resources according to the purposes for which they may be used and to account for their uses and balances. 2. Budgetary control techniques—to help assure appropriations are not overexpended and all resources due the G&NP organization are received by it. Question 1-2 a. A fund of a government organization is an independent fiscal and accounting entity. Each fund has a separate self-balancing set of accounts in which are recorded the resources segregated for specific purposes, the related liabilities and residual equity (fund balance or net assets), and the changes therein. Financial statements typically must be presented to report the financial position and operating activities of a fund of a government. b. As the term is generally used in commercial accounting, a "fund" merely indicates that a portion...
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...which is responsible for enforcing and administering the United States Department of Treasury revenue laws through the collection and assessment of taxes, determination of pension plan qualifications and even related activities (www.irs.gov). Another is the Securities and Exchange Commission known as the SEC; this is an independent federal agency which is responsible for regulating securities markets where stocks and bonds of major companies are traded. There is also the Financial Accounting Standards Board the FASB that is the largest independent US body that is responsible for establishing and interpreting the accounting standards and practices that are known as the Generally Accepted Accounting Principles (GAAP). The American Institute of Certified Public Accountants (AICPA) is a regulatory body that develops standards for auditing and other services performed by certified public accountants. The Governmental Accounting Standards Board (GASB) is the entity which is responsible for setting the generally acceptable accounting principles used by state and local governments and just like the aforementioned Securities and Exchange Commission; the GASB is a non-governmental, private organization. One regulatory body has a name that is sometimes jokingly referred to and pronounced “Peek-a-boo” that is the Public Company Accounting Oversight Board (PCAOB). It is surprisingly a private sector, non-profit organization that is responsible for overseeing the auditors of public companies...
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...be considered in applying the VIE (the Variable Interest Entity accounting considerations) in the noted Subsections as well as analysis of the design of the legal entity in two steps. Step 1 provides analysis of the risk to the legal entity. Step 2 requires determination of the purpose for which the entity was formed, including the variability that the entity was designed to create and pass through. ACS 810102525 introduces the circumstances that must be considered in determining the purpose(s) for which an entity was created and the variability that the entity was designed to create and pass. That includes: A. The activities of the legal entity; B. The terms of the contracts into which the legal entity has entered into; C. The nature of the legal entity’s interest; D. The manner by which the legal entity’s interests were negotiated and marketed to potential investors; and, E. Which parties significantly participated in the design or redesign of the legal entity. According to ACS 810102524 , the risks that cause or give rise to variability include those type of risks that characterize those in the case of Saturn and Venus, which include credit risk, operations risk, and equity price risk, especially given the nature and type of business in which the subject entities were going to participate. In its amendments to FASB (the Financial Accounting Standards Board), Interpretation No. 46(R), Statement of Financial...
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...CONTENT AND SKILL SPECIFICATIONS FOR THE UNIFORM CPA EXAMINATION Approved by the Board of Examiners American Institute of Certified Public Accountants May 15, 2009 Effective Date: January 1, 2011 Board of Examiners Examinations Team American Institute of Certified Public Accountants Parkway Corporate Center 1230 Parkway Avenue, Suite 311 Ewing, NJ 08628-3018 COPYRIGHT © 2009 BY AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS, INC. CONTENT SPECIFICATION OUTLINES (CSOs) The outline portions of the content specifications identify the extent of the technical content to be tested on each of the four sections of the Uniform CPA Examination. The outlines list the areas, groups, and topics to be tested in the following manner: I. (Roman numeral) Area A. (Capital letter) Group 1. (Arabic numeral) Topic Each outline is followed by information about selected publications that candidates may study to prepare for the Uniform CPA Examination. Weights The percentage range following each area represents the approximate percentage of total test questions associated with the area. The ranges are designed to provide flexibility in building the examination, and the midpoints of the ranges for all areas in each section total 100%. The examination questions will be selected from each area to fall within the percentage allocation range. No percentages are given for groups or topics. The presence of several groups within an area or several topics within a group does not imply equal...
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...At present, financial accounting standards are established and propagated on the basis of two key conceptual structures, namely, Financial Accounting Standards Board (FASB) and International Accounting Standards Boards (IASB) (Cong 2013). This essay will discuss and justify that accounting theory played a role in setting of accounting practices but it played no significant role in setting of accounting standards. Rather, several accounting standards were set by the conceptual frameworks formulated by the accounting standards-setting groups. Several examples will be presented for supporting the arguments. There is need to analyze and justify the evolution of accounting theory to conceptual structures because accounting standards play a vital...
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...Transactions and events in accounting are considered to be extraordinary items when they are of material effect that are not expected to repeat frequently and would not be seen as repetitive factors in any assessment of the ordinary operating procedures of the business. Extraordinary items are not new to financial statements in fact they have been around since the early to mid-1900. Events and transactions that are considered extraordinary items are constantly changing with everyday occurrences and happenings. Extraordinary items were originally defined in Accounting Principles Board Opinion No. 9 as “events and transactions of material effect that would not be expected to recur frequently and that would not be considered as recurring factors in any evaluation of the ordinary operating processes of the business” (Schroeder). The publication of this opinion No. 9 provided the following examples of events and transactions: “gains or losses from the sale or abandonment of a plant or a significant segment of the business, gains or losses from the sale of an investment not held for resale the write-off of goodwill owing to unusual events during the period, the condemnation or expropriation or properties, and major devaluations of currencies in a foreign country in which the company was operating” (Schroeder).This definition came under review in 1973, and the Accounting Principles Board determined that comparable items of revenues and expenses were not being classified in the same...
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...The International Accounting Standards Committee was formed in 1973. This committee was the first international standard-setting body. In early 2001, this Committee was reorganized and became the the International Accounting Standards Board (IASB) to independently develop and establish a single set of accounting procedures for international business. Since the reorganization of the IASB, the use of these international financial reporting standards (IFRSs) have been required or permitted in over 100 countries, including the European Union ("What Have IASB And FASB Convergence Efforts Achieved?", 2013). The IASB aims to make the entire world follow guidelines for financial reporting to make use and comparability of financial reports more consistent across all geographical areas. The Financial Accounting Standards Board (FASB) is the independent body that is responsible for the creation of GAAP. The board is the standard setting body in charge of standards for nongovernmental companies operating in the United States. Since 2002, the IASB and FASB have been working together to improve and converge U.S. GAAP and IFRS. The United States is not the only country working toward convergence, as of 2009, Japan and China were both working toward convergence of IFRS as well as their accounting standards. In February 2010 the Securities Exchange Commission (SEC) issued statements of support of the convergence in IFRS and U.S. GAAP. The FASB intends to analyze each of the differences within...
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...Cohn on August 31, 2015 After the International Accounting Standards Board (IASB) published a draft proposing changes in Revenue Recognition Standard on July 30, 2015, the Financial Accounting Standards Board (FASB) has also issued a similar proposed accounting standards update to clarify how to determine whether an entity involved in contract is a principal or an agent under the new revenue recognition standard. We found a news article written by Michael Cohn that discusses this recent FASB’s agenda in details. The proposed update will not change the principle part of new revenue recognition standard, but will clarify the implementation guidance on principal versus agent consideration. In the new revenue recognition standard, it points out when another party is involved in providing goods or service to customer, the entity is required to determine the nature of its promise. The determination will base upon whether the entity controls the good or the service before transferring to the customer. Specifically, if control of the goods or service belongs to the entity, the entity is a principal. On the contrary, the entity is an agent. There are some implementation issues, however, during this determination process. Those issues include how to identify the nature of the good or service, or how to apply control principle to certain types of transactions, and so on. In this case, the FASB has decided to propose an accounting standards update to address those issues related to...
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...Consolidation of Variable Interest Entities A Roadmap to Applying the Variable Interest Entities Consolidation Model March 2010 FASB material, copyright © by the Financial Accounting Foundation, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116, is reproduced with permission. This publication is provided as an information service by the Accounting Standards and Communications Group of Deloitte & Touche LLP. It does not address all possible fact patterns and the guidance is subject to change. Deloitte & Touche LLP is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte & Touche LLP shall not be responsible for any loss sustained by any person who relies on this publication. As used in this document, “Deloitte” means Deloitte & Touche LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. March 2010 Contents Acknowledgments Introduction Section 1 — Overview, Background, and Scope 1.01 1.02 Determining Which Consolidation Model to Apply Consideration of Substantive Terms...
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...identified in the Governmental Accounting Standards Board's Why Governmental Accounting and Financial Reporting Is—and Should Be—Different. The five environmental differences include mission/purpose, source of revenue, potential longevity, relationship with stakeholders, and role of budget. The mission/purpose is defined by the goals of the organization. The purpose of a commercial business is to make money. A non-profit organization’s purpose is to provide a service, without compensation from the people being served. The source of revenue comes from net income, which comes from a sale of goods or services in the private sector or in the public sector comes from tax dollars or donations. The longevity potential for a private business depends on the ability to generate a profit. In contrast a non-profit relies upon tax dollars or donations. The stakeholders of a private corporation are the owners/stockholder/investors. The stakeholders of a public organization are the taxpayers and general public being served. The budget in the private sector is flexible, depending on revenues and directors. The budget within a public organization is typically not flexible and has to be followed exactly. 1-3. Identify and briefly describe the three organizations that set standards for state and local governments, the federal government, and nongovernmental not-for-profit organizations. FASAB: Federal Accounting Standards Advisory Board provides accounting standards for congressional...
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...be considered in applying the VIE (the Variable Interest Entity accounting considerations) in the noted Subsections as well as analysis of the design of the legal entity in two steps. Step 1 provides analysis of the risk to the legal entity. Step 2 requires determination of the purpose for which the entity was formed, including the variability that the entity was designed to create and pass through. ACS 810102525 introduces the circumstances that must be considered in determining the purpose(s) for which an entity was created and the variability that the entity was designed to create and pass. That includes: A. The activities of the legal entity; B. The terms of the contracts into which the legal entity has entered into; C. The nature of the legal entity’s interest; D. The manner by which the legal entity’s interests were negotiated and marketed to potential investors; and, E. Which parties significantly participated in the design or redesign of the legal entity. According to ACS 810102524 , the risks that cause or give rise to variability include those type of risks that characterize those in the case of Saturn and Venus, which include credit risk, operations risk, and equity price risk, especially given the nature and type of business in which the subject entities were going to participate. In its amendments to FASB (the Financial Accounting Standards Board), Interpretation No. 46(R), Statement of Financial...
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...Wilt 2014/2015 Academic and study skills semester 1, period 2 Historical cost accounting v market value accounting. Jamie Short 10703330 In a report written by GAAP (2012, pp.101-121), Assets and liabilities have been recorded through historical cost accounting: a system where assets and liabilities are recorded and presented in the monetary amount paid or the consideration given at the time of their acquisition. But it possesses some vigorous imperfections in the context of the contemporary business environment which have made accounting bodies, especially The Financial Accounting Standards Board (FASB) is a private, not-for-profit organization whose primary purpose is to establish and improve generally accepted accounting principles within the United States in the public's interest.) and the International Accounting Standards Board (IASB) is the independent, accounting standard-setting body of the IFRS Foundation. (1986, pp.152-154), to probe for a number of alternative accounting methods. One of these alternatives is market value accounting that has been considered as the best alternative to the historical cost accounting. The business estimation of an asset is the sum at which that asset could be purchased or sold in a current exchange between ready gatherings. This paper will subsequently inspect the contrasts between these two methods for valuation. Historical cost accounting for a long time has been liable to numerous negative reactions, particularly as it...
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