...SUMMARY “Global Accounting Convergence and the Potential Adoption of IFRS by the United States: An Analysis of Economic and Policy Factors” by Luzi Hail, Christian Leuz and Peter Wysocki: In the world of accounting, abandoning the United States’ Generally Accepted Accounting Principles (U.S. GAAP) in favor of the International Financial Reporting Standards (IFRS) would represent a seismic shift that would require changing what has been the country’s accounting gold standard for decades. This is what the Securities and Exchange Commission (SEC) is contemplating for all publicly listed companies, starting in 2014. But according to a study released today (Friday, March 6) it is not clear whether such a major shift in standards would translate into large (net) benefits for most companies or the entire U.S. economy. The study, “Global Accounting Convergence and the Potential Adoption of IFRS by the United States: An Analysis of Economic and Policy Factors,” was done by Christian Leuz of the University of Chicago Booth School of Business, Luzi Hail of the Wharton School at the University of Pennsylvania and Peter Wysocki of the MIT Sloan School of Management. One of the touted benefits of moving to IFRS is that it can enhance the liquidity of capital markets and reduce companies’ costs of capital by providing investors with better information on corporate performance. However, the authors argue that this is true only if adopting a new set of standards actually improves the quality of...
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...to test a student’s achievement of objectives 1 and 4. It is an individual assessment task. Weighting: 10% Task details: The process of adopting the IFRS in Australia has led to some significant changes to some accounting standards and minor changes in others. A number of countries throughout the world are now undergoing a similar process as they too adopt the IFRS regime. However, a single global set of accounting standards has not been achieved as the United States continues to apply its own Generally Accepted Accounting Principles (US-GAAP) as endorsed by the US Financial Accounting Standards Board (FASB). In 2003 the International Financial Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) commenced a joint project with the aim of converging the IFRSs and FASB standards. This project will result in further changes which will flow through to Australia, but when complete, may ultimately result in a true international standardisation of accounting and a single set of global financial accounting standards. This task requires you to consider the implications to Australian financial reporting if this international standardisation occurs. What benefits can Australia expect from all this international standardisation? Required: In an essay you are required to explain “the benefits Australia can expect from the international standardisation of financial reporting”. You must use scholarly research to develop the arguments you present in...
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...could also be subjective and easily manipulated. This contrasts with the criteria of Australia’s basis for group consolidation, namely, “effective control” which is determined by control over the entity's board and the proportion of potential and current voting rights. The observations call for the principle-based accounting system instead of the insufficient and easily manipulated rules-based system. In sum, the abovementioned suggests that the financial reporting standard-setting process is largely uncertain and that the accounting standards may often be incomplete. More importantly, comparisons are made between the IFRS and Australia’s modified versions of IFRS and the results highlighted that Australia’s modified standards may sometimes be of superior quality and are more contextually relevant for Australian financial report users than the IFRS. Hence, from the above considerations, it is recommended...
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...Is the Difference in Accounting Treatment of Post-Retirement Benefits under IFRS Beneficial or Detrimental to the Financial Position of a Company Currently Reporting Under US GAAP? Megan N. Cook, CPA, CFE Accountancy 521 Professor Lawrence March 9, 2009 The first pension plan offered by an American employer was that of American Express in the year 1875. Amex’s plan did not resemble the plans that we see in today’s time; the first “modern” defined benefit plan was created in 1940 by the automotive behemoth General Motors. These plans of the past still do not resemble plans that we are familiar with today. In the past, employers could exercise a “pension put” option and, in essence, close the plan down at the current level of funding and turn the assets over to the retirees. This is not an optimal situation, as many plans at the time were severely under funded and retirees would be left with pennies on the dollar of what they were counting on for retirement. (Fortune, 2005) Post-retirement benefits are volatile on a couple of different fronts; up until the reforms in 1974 which created ERISA and the PBGC, employees had to put blind faith in their employers to secure their futures after their working years were over. (Fortune, 2005) On another front, these benefits pose a significant accounting problem – how should a company account for the costs and liabilities associated with these benefits they had to give their employees at a later and relatively indeterminable...
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...merchandise, the existing customer will receive a $25 credit towards their next purchase. The $25 credit represents the fair value of the cost Runway would pay to earn a new customer from an unrelated third party or marketing firm. Runway Discount should record the $25 Referral Credit as a marketing expense. According to 605-50-45-2 of the FASB Accounting Standards Codification, the referral credit should be considered as a cost incurred because it meets both of the following conditions: a. Runway Discount receives an identifiable benefit in exchange for the $25 credit. In addition, the $25 credit is separate from the recipient’s purchase of Runway Discount’s products in such a way that Runway Discount could have entered into an exchange transaction with a third party (marketing firm) that does not purchase its products and still receive the same benefit. b. Runway Discount can reasonably estimate the fair value of the benefit from a referred customer. Runway Discount should record the $25 referral credit when it recognizes the revenue created by the friend that was referred. Section 605-50-25-3 in the Codification states that in regards to sales incentives that will not result in a loss on the sale of a product, “the vendor shall recognize the cost of such a sales incentive at the later of the following: a. The date at which the related revenue is recognized by the vendor b. The date at which the sales incentive is offered” Due to the fact that choice...
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...purchases merchandise, the existing customer will receive a $25 credit towards their next purchase. The $25 credit represents the fair value of the cost Runway would pay to earn a new customer from an unrelated third party or marketing firm. Runway Discount should record the $25 Referral Credit as a marketing expense. According to 605-50-45-2 of the FASB Accounting Standards Codification, the referral credit should be considered as a cost incurred because it meets both of the following conditions: a. Runway Discount receives an identifiable benefit in exchange for the $25 credit. In addition, the $25 credit is separate from the recipient’s purchase of Runway Discount’s products in such a way that Runway Discount could have entered into an exchange transaction with a third party (marketing firm) that does not purchase its products and still receive the same benefit. b. Runway Discount can reasonably estimate the fair value of the benefit from a referred customer. Runway Discount should record the $25 referral credit when it recognizes the revenue created by the friend that was referred. Section 605-50-25-3 in the Codification states that in regards to sales incentives that will not result in a loss on the sale of a product, “the vendor shall recognize the cost of such a sales incentive at the later of the following: a. The date at which the related revenue is recognized by the vendor b. The date at which the sales incentive is offered” Due to the fact that choice a is...
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...MANAGING A REWARD STRATEGY Top of Form 1 History of Reward The aims of a reward strategy are to try and be systematic about which HR mechanisms attract, retain and motivate staff. Historically the view was that salaries were what attracted a person to an organisation, benefits kept them there, while bonus and incentive schemes motivated them. Reward was regarded as consisting of three distinctive parts: Remuneration - covering such aspects as job evaluation, salary structures and incentive schemes. Benefits - which tend to be offered to all employees irrespective of their grade, such as paid leave, employee assistance programmes or Christmas parties. Perquisites - which are benefits that tend to provided to discrete categories of employees, such as a company car/car allowance, private healthcare or concierge service. 2 Reward Today More recently, this divide between which parts of reward are best suited for attraction and recruitment, retention and motivation has broken down. Modern research shows that individuals are attracted, retained and engaged by a whole range of financial and non-financial rewards and that these can change over time depending on their personal circumstances. The financial elements of a package are not considered particularly important by individuals in some situations. For instance, people at the beginning of their career may be more interested in getting access to training and career development. People at the end of their career are...
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...<<your name>> <<instructor’s name>> <<course title>> <<date>> Assume you are the HR Director for a midsized company and must make a decision about the company’s employee benefits package. You have not been in this position before and must maintain the current benefits budget; there may be no increases or changes to the package that will result in additional spending. 1. Describe the selection process you would use to make the most cost-effective and employee-friendly decision. Answer – Choosing the right type of benefits package is a very critical component of being attractive employer, helping attract and retain satisfied employees, by ensuring that majority of employee needs are taken care of. Given the huge number of options that are available in the market, with many more coming up every year, it becomes very tricky to determine what benefits package would be the most beneficial to the employee. Given the constraints on budgets, there must be multiple trade offs made between the extent and variety of benefits provided, and therefore the employer has to determine which package would cover the needs of majority of its employees. In this scenario, given that the available budget is fixed and the benefit plan for the next year has to at least as good as or even better than the previous year, the HR director has to think creatively to come up with a package that best aligns with the needs of the employees. The end result...
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...Business School Department of Business System NEW ADVANCES IN BUSINESS 12-13TYAABSS007-3: INNOVATIVE MOTIVATION IN ECONOMIC CRISIS: THE FLEXIBLE BENEFITS SCHEMES BY Mai Ngoc Nguyen 1215894 An assignment submitted in partial fulfillment of the assessment for the New Advances in Business (12-13TYAABSS007-3) unit March 2013 * Contents Contents 2 EXECUTIVE SUMMARY 3 LIST OF FIGURES 3 LIST OF TABLES 3 1 Introduction 4 2 Literature review 6 3 The economic crisis and the transition in methods of motivation: The need for an innovate benefits package 9 3.1 Impacts of the economic crisis on employees and employers 9 3.2 The transition in methods of motivation: The need for an innovative benefits package 12 3.3 The traditional benefits package and its motivating effectiveness 14 4 The flexible approach to benefits provision in a gloomy economy 16 4.1 Effectiveness of the flexible benefits schemes in motivation 17 4.2 Factors affecting the motivating effectiveness of the flexible benefits schemes 18 4.3 Current issues influencing the adoption of the flexible benefits schemes 20 5 Conclusion 21 APPENDIX - Changes in the British WorkForce 22 REFERENCES 23 FURTHER READING 27 * EXECUTIVE SUMMARY In recent years, in the UK, both employees and employers have to bear negative impacts from the recession, especially employees with their financial difficulties and diverse needs. It is more important than ever for motivation. However...
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...workers learned that the white minority prevented their wage increase,they decided to demonstrate,but the demonstarion became a riot.The city was in a state of emergency,and in the mayhem,stores were looted and four men loss their lives while others were injured.The ruling class could no longer ignore the workers cries for more equitable wages.Following a discussion with the Duke of Windsor where the workers were represented by Milo Butler,A.F.Adderly,Percy Christie and Dr.Claudius Walker the workers were granted an increase of one shilling per day and a free meal at lunch. The Burma Road Riot was a critical element in the fight for workers rights and resulted in the first increase in wages for Bahamian workers and the first fringe benefit which was a free meal.The Riot was also the catalyst for organized labour in the...
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...Spending Plans December 8, 2011 Until recently employers have offered employees benefits in a standard way. All employees received the same benefits in the same way, regardless of what they needed as an individual. This standard method of benefits is much easier for employers to offer; giving them choices is generally too much work. But employees may want something different than what the employer may be offering. There have been recent developments that have opened up with a new approach offering benefits called “flexible benefits”. Some included benefits are flexible spending accounts which include health care and dependent care options. The health care FSA allows employees to use tax free dollars for eligible health care expenses that are not covered by insurance for the employee, their spouse and eligible dependants. The dependent care FSA lets employees use tax free dollars to pay for children and elder care expenses incurred so that employees may work or attend school full time. By offering a flexible spending plan employees can direct a portion of their gross income into an account and take out pre taxed dollars to pay for health care or child care expenses. A flexible spending plan is good for the employer as well as the employee. Flexible spending accounts allow employees to pay for out of pocket health care and dependent day care expenses with tax free money. Flexible benefits plans are also authorized under section 125 of the Internal Revenue Code. Flexible...
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...Compensation and Benefit Plans Name: Institution: The strategic goal of any company is to provide the best service to customers while remaining cost effective and decreasing expenses. The company’s decision to hire a Computer Information System (CIS) Programmer is aimed at helping the company close the organization’s current gap and save the organization money in the long run. The incoming CIS programmer is expected to help the company achieve a stress free working environment for the rest of the employees and help the company make more profits from delivering to the company’s expectations. Hiring a new employee calls for implementation of a compensation and benefits plan that meets the needs of both the employee and the hiring organization. Benefits plan are designed to address specific needs and are often not in cash form. There are different approaches that an organization can choose to use while implementing a compensation and benefit plan. One such justifiable approach is one that recommends that the employee get insurance benefits, health and security benefits, vacation pay, stock options, profit sharing, contribution to retirement and pay for time not worked. Benefits are forms of value, apart from payment, that are given to employees in return for their inputs to the organization. There are other forms of intangible benefits that the company can decide to extend to the employee, which includes,...
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...Request: Development an installation of a benefits election system to support the tracking and reporting of employee (union and non-union) benefits. Background of Request: Memo to Graham Grove, 3/22/04 , on Health Insurance Benefits. This memo is located on the Huffman Trucking Intranet site under Human Resources - Communications tab. Expected Results/Impact when completed: Creation of a project plan in Microsoft Project that will be used to manage, track and report the progress of this software development to the management team. Facts About Huffman Trucking Huffman's primary customers include: • U.S. Government • Automotive parts suppliers to major manufacturers • Electronic consumer products • Raw materials (polymer) for manufacturers of plastic products • Any customer requiring special accommodations, such as wine, computers, munitions, etc. Huffman has facilities in: • Cleveland, OH • Los Angeles, CA • St. Louis, MO • Bayonne, NJ Huffman employs: • 925 drivers • 425 support personnel Huffman owns and operates: • 800 road tractors • 2,100 45' trailers • 260 "roll-on/roll-off" units SR-ht-001: Create a Benefits Election System Define Problem 5 days Analyze Situation 15 days Design Solution 10 days Implement Design 20 days Support Product 10 days Define Problem - Understand Organizational Context of Huffman Trucking HR Department - Understand the history of the problem with Benefits tracking System - Identify the team to...
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...project” from week two. Look at page 49 of that project) Wages and Salaries: We have a total of 400 employees. Average wage is established at $12 per hour. 40 hour work weeks. 160 work hours in a month. 160 hours X $15= 2,400 2,400 X 400 employees= $960,000 a month in wages for all four warehouses, January thru November. We said that the month of December will award a 10% Christmas bonus for all staff. The 10% bonus is $96,000 + $960,000= $1,056,000 for the month of December The total annual wages is $11,616,000 (add the month of December to 960,000 X 11 months to get that answer) We will provide employee benefits (Insurance). {Extracted from “solar light” project, page 54} Workers Compensation. $450,000 annually Liability. $275,000 annually Professional Liability $4,000 a year Health Insurance $700,000 annually Total Insurance and benefits annually= $1,429,000 OR $119,083 a month. Utilities: Utilities are for...
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...Benefits programs that a company chooses to employ have an impact on the attraction and retention of employees and offering only minimally required standards is not enough. As an HR consultant to the small business, I would recommend the following to be added. First, paid sick leave would be an important voluntary benefit program to have. Employees are liable to be absent from work due to medical reasons and the company should excuse them for that. Even though some employees abuse such programs, there can be ways to get around that issue such as paying employees for the number of days of unused sick leave. Related to this is extending the number of holidays and vacations beyond the minimum requirement. This could be really important because it helps relieve stress, reduce fatigue and increase employees’ productivity. Another benefit program is educational assistance where the company rewards employees for striving to enhance their knowledge by taking courses that are related to their line of work. This is beneficial because employees feel that they can accomplish more in the organization and become more ambitious if a reward is a job promotion for example. In addition, financial services such as discount plans (buying company products at a discount) are really attractive for some employees and encourages them to join the company. The most important benefit to add would be child care. It would help retain key employees and reduce stress related to balancing work and...
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