...Finance Assignment Names: ABRAR MOHAMMAD MAHA MOHAMMAD Student I.D.’s: 7611, 7422 Class: C-17 Course Title: Principles of Finance Course Code: FIN211 Introduction Financial Statement: It is a formal record of the financial activities of a business, person, or other entity. In British English—including United Kingdom company law—a financial statement is often referred to as an account, although the term financial statement is also used, particularly by accountants. For a business enterprise, all the relevant financial information, presented in a structured manner and in a form easy to understand, are called the financial statements. They typically include four basic financial statements, accompanied by a management discussion and analysis: 1. Statement of Financial Position: also referred to as a balance sheet, reports on a company's assets, liabilities, and ownership equity at a given point in time. 2. Statement of Comprehensive Income: also referred to as Profit and Loss statement, reports on a company's income, expenses, and profits over a period of time. A Profit & Loss statement provides information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state. 3. Statement of Changes in Equity: explains the changes of the company's equity throughout the reporting period 4. Statement of cash flows: reports on a company's cash flow activities, particularly its operating...
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...Trueblood case 11-3: Masters of the Universe 1. Statement of the problem: Applying key concepts of the VIE model in ASC 810-10 (Statement 167), in order to perform a consolidation analysis for a Variable Interest Entity (VIE). 2. Summary of relevant (key) facts As the case depicts, ‘Jupiter’ is a joint venture formed by 2 unrelated parties, Saturn Inc. and Venus Inc. Jupiter has been created with the purpose of owning and operating organic clothing manufacturing and design facilities and selling the output to unrelated retailers. The key facts highlighted in the case are as follows: * The proportion of Saturn’s and Venus’s ownership interest( as determined by their capital contribution) in Jupiter is 51 percent and 49 percent respectively; same is the ratio in which Jupiter’s profit and losses are shared between the two parties * From Saturn’s viewpoint, Jupiter fails to qualify for joint venture scope exception stated in ASC 810-10-15-17(d) * In accordance with ASC 810-10-25-42 and 25-43, Saturn and Venus cannot be considered as related parties * As pursued by ASC 810-10-15-14(a), Jupiter is viewed as a Variable Interest Entity due to the entity’s nature and the amount of equity investment at risk * Jupiter’s Articles of Incorporation requires a majority vote for approval of most of the Board’s decisions, with the exception of decisions concerning the CEO’s appointment or removal, mergers or acquisitions, admitting new members into the joint venture and...
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...Interna'onal Financial Repor'ng Standards IFRS 1 • • • • • • • • • • • • • • • • • • • • • • • • • First-‐'me adop'on of Interna'onal Financial Repor'ng Standards IFRS 1 applies -‐-‐> only when an en'ty adopts IFRSs -‐-‐> first 'me First IFRS financial statements -‐-‐> first annual financial statements -‐-‐> (in which) -‐-‐> an en'ty adopts IFRSs IF the first IFRS financial statements cover two annual periods ending December 31, 2009 (compara've informa'on is required by IAS 1) -‐-‐> first IFRS repor'ng period = January 1, 2009 -‐ December 31, 2009 -‐-‐> earliest period in IFRS financial statements = January 1, 2008 -‐ December...
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...BAC 3634 Corporate Accounting I Trimester 1 2015/2016 Group Assignment Topic: IFRS & IAS and The Practical Disclosure In Fraser & Neave Holdings Berhad Prepared for: Mdm. Haslin Binti Johari Prepared by: No. | Name | ID | 1 | Tan Se Man | 1102703355 | 2 | Wong Chin Ang | 1102703373 | 3 | Gan Hui Leng | 1102703420 | 4 | Neo Zi Sin | 1102703513 | 5 | Cheah Zhi Qin | 1112701231 | Table of Contents List of Diagrams I 1.0 Introduction 1 1.1 Economics of F&N Holdings Berhad 1 2.0 The Users of Financial Statements and Their Information Needs 4 3.0 Discussion of Standards Related to Consolidation and its Actual Presentation 6 4.0 Conclusion 14 Reference 16 List of Diagrams Exhibit 1 Group Structure & Summary of Ownership Interests in Subsidiary Exhibit 2(a) Disclosure of Ownership Interest in Subsidiaries Exhibit 2(b) Disclosure of Ownership Interest in Subsidiaries Exhibit 3 Consolidated and Separate SOPL Exhibit 4 Consolidated and Separate Statements of Comprehensive Income Exhibit 5(a) Consolidated SOFP Exhibit 5(b) Separate SOFP Exhibit 6 Consolidated SOCIE Exhibit 7 Separate SOCIE Exhibit 8 Consolidated and Separate SOCF Exhibit 9 Disclosure about Reporting Date Exhibit 10 Acquisition Method of Business Combinations Exhibit 11 Comparisons of Investment in Subsidiaries of 2 years Exhibit 12 Goodwill as Intangible Assets and Computations Exhibit 13(a) Goodwill Recognized...
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...Devry College of NY | Masters of the Universe | Accounting Project Case 11-3 | 12/7/2011 | | Introduction Mergers and Acquisitions are a normal part of the Corporate Finance world. Every week we hear news about large and small corporate mergers and buy-outs. They bring separate companies under the umbrella of a larger company that can be more efficient, created more profits and often offer more products, services and better quality. In this project we look at a joint venture type of merger that brings two companies together in order to form a third company and compete in new market segment. Saturn Inc. and Venus Inc. are two unrelated companies that have decided to form a Joint Venture to form a third company that will be called Jupiter Inc. The new company will be owned 51 percent by Saturn and 49 percent by Venus. At the forming of the Jupiter Inc., Saturn contributed $561 million and Venus contributed four manufacturing facilities and assembled the workforce. Venus’ contribution came with a fair value of $539 Million. Venus was already in the clothing manufacturing business and was looking for an exit strategy because it no longer seemed like a good fit for Venus Inc. Saturn Inc. wanted to expand its manufacturing of children’s clothing. The newly formed company, Jupiter Inc. would satisfy both of the needs by entering into a relatively new industry in making and selling organic clothing to be sold to unrelated retailers. Saturn and Venus...
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...the voting control model, a company must first look to ASC 810-10 to determine whether the entity is a VIE that should be evaluated for consolidation under the VIE model. As a result, every entity should be carefully analyzed to determine whether it is a VIE or a VOE in order to determine the appropriate model for evaluating which party may have the controlling financial interest. ASC 946 FASB AS Update 2009-16 FASB AS Update 2009-17 IFRS 10, Consolidated Financial Statements IFRS 10 establishes a single control model which applies to all entities and will require management to exercise significant judgment to determine which entities are controlled, and therefore are required to be consolidated by a parent, compared with the requirements which were in IAS 27. IFRS 10 does not change consolidation procedures, rather it changes whether an entity is consolidated by revising the definition of control. IFRS 11, Joint Arrangements IFRS 11 uses the principal of control in IFRS 10 to define joint control. In addition, IFRS 11 removes the option to account for jointly control...
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...System for U.S. Issuers A Comparison of U.S. GAAP and IFRS A Securities and Exchange Commission Staff Paper November 16, 2011 OFFICE OF THE CHIEF ACCOUNTANT UNITED STATES SECURITIES AND EXCHANGE COMMISSION This is a paper by the Staff of the U.S. Securities and Exchange Commission. The Commission has expressed no view regarding the analysis, findings, or conclusions contained herein. TABLE OF CONTENTS I. II. Introduction..........................................................................................................................1 Methodology ........................................................................................................................2 A. Scope of the Analysis...............................................................................................2 B. MoU and Other Joint Projects..................................................................................3 C. SEC Rules and Regulations .....................................................................................8 D. General Observations and Clarifications .................................................................8 Comparison of Requirements ............................................................................................11 A. Accounting Changes and Error Corrections ..........................................................11 B. Earnings Per Share.....................................
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...Comparison between U.S. GAAP and International Financial Reporting Standards May 2013 © 2013 Grant Thornton LLP All rights reserved U.S. member firm of Grant Thornton International Ltd Comparison between U.S. GAAP and International Financial Reporting Standards 2 Contents 1. Introduction .................................................................................................................................................. 6 International standards and the IASB ............................................................................................................ 6 Financial accounting and reporting in the United States ................................................................................ 6 IFRS and U.S. GAAP comparison ................................................................................................................. 6 Overall financial statement presentation ................................................................................................... 8 General .......................................................................................................................................................... 8 Statement of financial position / balance sheet .............................................................................................. 9 Statement of comprehensive income / income statement ........................................................................... 12 Statement of changes in equity...
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...IFRS and US GAAP: similarities and differences IFRS readiness series October 2012 Table of contents The heart of the matter 2 US financial reporting will change significantly within the next several years An in-depth discussion 4 Examining the implications IFRS affects US businesses in multiple ways What this means for your business 6 Anticipate and manage the change What companies can and should do now October 2012 The heart of the matter US financial reporting will continue to change over the next several years Although US companies will not when, and how IFRS might be be permitted to use International incorporated into the US financial Financial Reporting Standards (IFRS) reporting system. for US public filings in the foreseeable • In May 2011, the SEC’s Office of future, IFRS has been affecting US the Chief Accountant published a companies for some time, primarily Staff Paper exploring one possible through engaging in cross-border method to incorporate IFRS merger-and-acquisition (M&A) into the US financial reporting activity, meeting the reporting needs system, involving an active of non-US stakeholders, and assisting Financial Accounting Standards with or monitoring of the IFRS Board (FASB) incorporating IFRS requirements of non-US subsidiaries. into US GAAP over an extended US companies are also becoming period of time (the “endorsement” increasingly aware of IFRS, as key method). Under this method, the aspects of US generally...
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...23 Consolidation: controlled entities ACCOUNTING STANDARDS IN FOCUS LEARNING OBJECTIVES IFRS 10 Consolidated Financial Statements After studying this chapter, you should be able to: 1 explain the meaning of consolidated financial statements 2 discuss the meaning and application of the criterion of control 3 discuss which entities should prepare consolidated financial statements 4 understand the relationship between a parent and an acquirer in a business combination 5 explain the differences in disclosure requirements between single entities and consolidated entities. CHAPTER 23 Consolidation: controlled entities Prepared for Rotterdam School of Management 429 813 INTRODUCTION The purpose of this chapter is to discuss the preparation of a single set of financial statements, referred to as the consolidated financial statements. The preparation of consolidated financial statements involves combining the financial statements of the individual entities in a group so that they show the financial position and financial performance of the group of entities, presented as if they were a single economic entity. The first issue covered in this chapter is the determination of which entities are required to prepare consolidated financial statements. This involves a discussion of the criterion for consolidation and its application to economic situations. The second issue in this chapter is the accounting procedures for preparing the consolidated financial...
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...focus on the consistence of the standards for international accounting. In 2003 FASB and the IASB decided to come together and create a short-term and long-term convergence project to attain a better uniform set of accounting standards. Among the efforts are (1) The FASB’s Short-term international convergence Project, (2) the Norwalk Agreement, and (3) the Roadmap to Convergence (Schroeder, Clark, & Cathey, 2011). The short-term convergence project will consist of nine short-term projects. These projects will consist of segment reporting (ISAB), fair-value option, including investment properties (IASB), borrowing cost (IASB), government grants (IASB), impairment (joint), income tax (joint), joint ventures (IASB), research and development (FASB), and subsequent events (FASB) (Hughes & Sander, 2007). FASB has 11 long-term projects that were completed or processed by the end of 2008. The convergence project that was thought to be completed by June 2011 had been pushed back to 2012. Brief History of FASB and IASB The Wheat Committee and the Trueblood Committee were appointed by the...
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... Customer Inserts Grade/Course (December 11, 2011) Outline ➢ Introduction ➢ Changes in Leasing accounting ➢ Effect of the changes on the industry ➢ Conclusion A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset for a certain time. Leasing is a common activity and agreement, which appears on company’s financial statement all the time, no matter fortune 500 companies or startup firms. Most of the companies will rent tangible property including office and machines that is called rental agreement. When it comes to accounting, leasing becomes one of the most important sources of the financial statement. Since 1977, Financial Accounting Standards Board (FASB) set accounting standards to regulate leases that show on financial statement. However, current accounting rules for leases unable to meet the needs of users of financial statements because they do not provide a truthful representation of leasing transaction (Financial Accounting Standards Board). As a result, Financial Accounting Standards Board (FASB) and International Financial Reporting Standards (IFRS) decided to create joint project to redefine the accounting rules for leases (IFRS 1). Therefore, the draft of new accounting standard were made in 2010 and expected to be applied in 2013. The FASB and IFRS have proposed various changes, which should be implemented...
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...2009 International Accounting Standards Board (IASB® ) IFRS for SMEs ® International Financial Reporting Standard (IFRS®) for Small and Medium-sized Entities (SMEs) International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) The International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) is issued by the International Accounting Standards Board (IASB), 30 Cannon Street, London EC4M 6XH, United Kingdom. Tel: +44 (0)20 7246 6410 Fax: +44 (0)20 7246 6411 Email: iasb@iasb.org Web: www.iasb.org The International Accounting Standards Committee Foundation (IASCF), the authors and the publishers do not accept responsibility for loss caused to any person who acts or refrains from acting in reliance on the material in this publication, whether such loss is caused by negligence or otherwise. The IFRS for SMEs and its accompanying documents are published in three parts: ISBN for this part: 978-1-907026-17-1 ISBN for complete publication (three parts): 978-1-907026-16-4 Copyright © 2009 IASCF All rights reserved. No part of this publication may be translated, reprinted or reproduced or utilised in any form either in whole or in part or by any electronic, mechanical or other means, now known or hereafter invented, including photocopying and recording, or in any information storage and retrieval system, without prior permission in writing from the IASCF. International Financial Reporting...
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...Standard Board (IASB or collectively the boards) and the Financial Accounting Standards Board of US (FASB or collectively the boards) have been working together on a project to revise and converge IFRS and US GAAP on revenue. Consequently, the Boards have jointly issued two exposure drafts outlining proposed changes. The latest one was published in November 2011 with public comments received in March 2012. If adopted, it will substitute all revenue standards prescribed by IFRS including IAS 11 Construction Contracts and IAS 18 Revenue and relevant interpretations and most of the revenue recognition requirements and related guidance in US GAAP. This paper, first of all, will provide a brief background of the joint project. Then it will highlight proposed changes and its implications in key areas. Finally, it will discuss effective date, early adoption and transition of the new standards and offer some alternative view. Background While the definition of revenue in IFRS seems clear, revenue requirements in IAS 11 and IAS 18 actually could be problematic to be applied to complicated transactions. Additionally, some application guidance on critical issues such as revenue for multiple element agreements is quite limited. Therefore a number of entities have established their IFRS accounting guidelines by resorting to parts of US GAAP. However, US GAAP consists of broad concepts and many requirements issued by multiple standard setters, thus resulting in varied accounting treatments...
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...working on joint projects a.k.a convergence projects designed to improve both US Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS), eliminate differences between them, and ultimately make the standards fully compatible. In 2010, to increase efficiency the boards decided to focus on the priority projects. Two of those projects, fair value measurement and statement of other comprehensive income, are poised for release. Now, the “big three” remain—financial instruments, revenue recognition, and leases. The IASB is also working to its monster project on insurance contracts, with the FASB closely engaged in the discussion. Therefore, bellow is the list of the active joint FASB/IASB projects according to current technical plan on the fasb.org website: - Accounting for Financial Instruments (Updated November 10, 2011): • Classification and Measurement (Updated November 10, 2011); • Impairment (Updated November10, 2011); • Hedging (Updated November 10, 2011). - Revenue Recognition (Exposure Draft issued November 14, 2011); - Leases (Updated November 15, 2011); - Balance Sheet – Offsetting (Updated August 15, 2011); - Consolidation: Policy and Procedures (Exposure Draft issued November 3, 2011 and updated November 23, 2011; - Investment Companies (Exposure Draft issued October 21, 2011 and updated November 20, 2011); - Insurance Contracts (Updated November 22, 2011). Also, a list of active and inactive joint FASB/IASB...
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