...REPORTING DATE CIA 1003 INTERMEDIATE FINANCIAL ACCOUNTING AND REPORTING CAEA 1214 FINANCIAL ACCOUNTING AND REPORTING II Semester 2, 2015/2016 Learning outcome • Determine the different types of events after the reporting period in accordance with MFRS110. • Apply MFRS 110 to account for events after the reporting period either to: • Make adjustments in the financial statements • Prepare the necessary disclosures • Present the different types of events after the reporting period in the financial statements in compliance with MFRS110. Lecture outline • Introduction • Definitions • Types of Events -Adjusting Events -Non Adjusting Event • Other Issues -Date of authorization for issue -Dividends -Going concern -Disclosure Introduction • Bursa Malaysia requires large publicly traded companies to lodge their unaudited financial statements within 2 months of fiscal year-end and full financial statements within 4 months • Business continues during this “subsequent period” and events could take place that have an impact upon the firm’s financial statements for the preceding year • These events are referred to in the accounting literature as subsequent events or post-balance sheet events. Introduction • The IASB has released IAS 10, dealing specifically with the accounting for subsequent events. • IAS 10 requires that companies adjust the reported amount of assets and liabilities if events occurring after the balance...
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...Going Concern issues in financial reporting: a guide for companies and directors Published in 2009 by: Australian Institute of Company Directors (AICD) Level 2 255 George Street Sydney NSW 2000 Telephone: (+61 2) 8248 6600 Facsimile: (+61 2) 8248 6633 www.companydirectors.com.au publications@companydirectors.com.au Auditing and Assurance Standards Board (AUASB) Level 7 600 Bourke Street Melbourne VIC 3000 Telephone: (+61 3) 8080 7400 Facsimile: (+61 3) 8080 7450 enquiries@auasb.gov.au www.auasb.gov.au © Australian Institute of Company Directors (AICD) © Auditing and Assurance Standards Board (AUASB) © Financial Reporting Council (UK) 2009. Portions of this publication have been adapted and reproduced from an Auditing Practices Board Bulletin: Going Concern Issues During the Current Economic Conditions (December 2008) with the kind permission of the Financial Reporting Council (UK). All rights reserved. For further information please visit www.frc.org.uk or telephone +44 (0)20 7492 2300. © Portions of this publication have been adapted and reproduced from a KPMG Flash Report: How Concerned Should Directors be with Going Concern? (February 2009) with the kind permission of KPMG. All rights reserved. Typeset by Endnote design Printed by Ligare Pty Ltd National Library of Australia Cataloguing-in-Publication entry Going Concern issues in financial reporting: a guide for companies and directors/AICD, AUASB ISBN 9781876604158 (pbk.). 9781876604172...
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...Empathy is a very important trait in people because it shows that you care about the other person. It shows that you care even if you have went through the same thing. There's also a lot of different kinds of empathy. First of all, there's different kinds of empathy. First there is effective empathy, that is where you can share the emotions of others. Then their is cognitive empathy where you understand the emotion but don’t share them. Like a psychologist who who gets the emotion in a rational way even though client tells them. Last their is emotional regulation in this you can regulate someone’s emotion like a surgeon needs to control their emotions during operating on a patient. Secondly, we need to have empathy to feel someone's emotions....
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...Going concern concept The going concern concept assumes that an enterprise or the accounting entity has an indefinite or unlimited life or existence. It means that the intention of the business is to carry for a sufficiently long period of time to carry out its existing activities and commitments. It will not be liquidated or dissolved in the immediate future unless there is clear evidence or a specific instruction to the contrary. For Example: - where the venture is for a specific purpose like setting up a stall in an exhibition or fair or the construction of a building or bridge etc. under a contract, the business comes to an end on the completion of the project. Experience indicates that in spite of several business failures, enterprises have a fairly high continuance rate; certain entities have been in existence for more than a century even though the owners have changed. The business entities are therefore going concerns in the majority of the cases and it has proved useful to adopt continuity assumption for accounting purposes. Advantages 1. It provides a sound basis for the income or profit measurement. It means that the items which provide future economic benefit or which are used for more than one year are recorded a fixed assets rather than as expenses only because of the going concern assumption. 2. The going concern assumption facilitates the classification of assets and liabilities into short-term and long-term respectively 3. It is due to the...
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...Fundamental Design Principles Separation of concerns • To prevent overlapping between components of the system, all “concerns” (aspects and mechanisms) of the system should be separate. The codes for each concern should be separated from the other to prevent co-locating. This also prevents interdependency within the system and helps to maintain the system easily. • This is beneficial in architecture because separation of concerns promotes organization. Each application of a software has a specific code, and separation of these codes leads to an effective and organized layered effect. A software may have business aspects, user interfaces, structure and design codes, etc., there may be more than one application of the software working together. As long as the codes of these mechanisms are separated, there will not be an overlap leading to malfunctioning. Also if each section of a system consists of a specific set of features, going back and modifying or repairing a certain feature is easily done without disturbing other aspects of the system. Single responsibility principle • In a software or system, each module should only have one task or responsibility. Responsibilities can also be described as “reasons for change.” • Each mechanism of the system should only be responsible for one task. Providing multiple tasks for one module can overload that aspect of the system and lead to faults. In an example of opening a browser page, there is a functional aspect and the cosmetic...
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...'Definition of the 'going concern' concept The 'going concern' concept directs accountants to prepare financial statements on the assumption that the business is not about to go broke or be liquidated (i.e. where the business closes and sells all the assets for whatever price they can get). So, unless there is significant evidence to the contrary, accountants will base their valuations and their reporting of financial data on the assumption that the business will remain in existence for an indefinite period. An indefinite period means the foreseeable future or long enough for the business to meet its objectives and to fulfill its commitments. It is important to note that the 'going concern' concept does not imply or guarantee that the business is profitable and will remain so for the foreseeable future. So, the 'going concern' concept assumes that the business will remain in existence long enough for all the assets of the business to be fully utilized. Utilized assets means obtaining the complete benefit from their earning potential. (i.e. if you recently purchased equipment costing $5,000 that had 5 years of productive/useful life, then under the going concern assumption, the accountant would only write off one year's value $1,000 (1/5th) this year, leaving $4,000 to be treated as a fixed asset with future economic value for the business). The 'going concern' concept supports the assumption that when a business buys assets like land, equipment, and buildings, it does...
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...Modularization, Commodization Modularity Definition: Modularity is a very general set of principles for managing complexity. By breaking up acomplex system into discrete pieces—which can then communicate with one another onlythrough standardized interfaces within a standardized architecture (Langlois, 2000) * Modularity is based on a systems theory view of organizations and their processes. It seeks to investigate how a system’s components are ‘coupled’ together and how tight these bonds are. * Modularity is important today because of the increased complexity of modern technology. * The driving normative basis for the investigation is that increased modularity enables the parts of a system to be separated and combined with much greater flexibility, and that such flexibility is desirable. * What is new is the application of the idea of modularity not only to technological design but also to organizational design. * A complex modern society might be made more productive through a modular design of social and economic institutions. * In a world of change, modularity is generally worth the costs. The goal is to find the modularization that minimizes interdependencies and most cleanly decomposes the system. * Innovation that takes place through change in the modules we can call modular innovation. * Handling complex systems become easier if break them up into sub-systems. * Complex product or process composed of smaller sub-systems that can be...
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...Biodiversity in the Boreal Forest • Biodiversity can be defined as the variation of life within a biome or ecosystem. Unfortunately, Biodiversity around the world is at risk due to human interference and climate change. However changes within these forest and/or ocean ecosystems also impact the human population, as we depend on these crucial bionetworks for our very own existence. • The Boreal forest is a band of forest that stretches across the northern hemisphere, which includes the following countries: Canada, Russia, United States and the northern countries of Europe such as Sweden, Norway etc… (Green displays the areas where the Boreal forest is situated) • Within Canada, the Boreal forest region covers more than 290 million hectares. •This forest is primarily dominated by coniferous trees, namely: Jack Pine, Balsam Fir, Red Pine, White Pine, Black Spruce, White Spruce, Tamarack, Paper Birch, Eastern White Cedar, etc… • The leading cause of most threats upon ecosystem biodiversity is climate change; such is the case in Canada’s the Boreal forest. • Climate change also has an effect on the number of forest fires. • Invasive alien species are also a huge factor in destroying biodiversity in the Canadian Boreal forest. • The Boreal forest is the largest intact forest and wetland ecosystem remaining on earth. • One of, and perhaps the biggest threat to biodiversity in the Boreal Forest is Human infringement. • In summation the best way to preserve the Canadian...
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...Focal Concerns Perspective Focal Concerns Theory The focal concerns theory was developed by Stenonlzxd and his fellow colleagues in 1980. The basis of this theory argues that judges presiding over trials base there decisions around three focal concerns of blameworthiness, practical constraints, consequences, and protection of the community. For example, if a defendant is viewed as blameworthy, dangerous and less likely to have practical constraints and consequences, they would receive much harsher or severe sentences. The first focal concern focus' on the blameworthiness of the defendant. The focus specifically reflects on the seriousness of the offenders involvement with the crime and the offender previous record. In other words, the more serious the offense and the more criminal offenses the offender posses, the more blameworthy the offender appears. The next focal concern is the protection of the community. Judges tend to based their perception of recidivism or re-incarceration by dangerousness of the offender. The more dangerous a offender appears, they will have a higher rate of recidivism is which will cause them to receive a longer than an average sentence length and severity. The last focal concern that a judge considered are the practical constraints and organizational restraints. Organizational constraints are considered to be things like flow of court cases and overcrowding of correctional organization. The practical constraints refer to the offender...
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...Plant Succession - Definition Plant Succession Definition Stages Tolerance • The orderly process of one plant community gradually or rapidly replacing another – Can result from the developmental changes in the ecosystem itself – Or from disturbances such as wind, fire, volcanic activity, insects and disease or harvesting • In a particular environment, there is a characteristic sequence of biotic communities that successively occupy and replace each other over time following disturbance Stages of Succession • Primary succession – Initiated by disturbances that expose substrates and are left with essentially no plant growth at the beginning – Examples: glacial retreat; volcanic ash deposition Mt. St. Helens May 18, 1980 Gilkey Glacier, Alaska from www.geophot.de • Secondary succession – Established plant community has been destroyed but without severe disturbance of the soil – Example: forest succession following wildfire - pioneer forest re-establishes and is eventually replaced with climax forest wildfire from www.us.gov 1 Plant Succession • Seral stages • Climax stage Stages of Succession • Seral communities: The various “temporary” communities in the succession • Seral species - those that will ultimately be replaced • examples: annual plants, shrubs, intolerant trees Stages of Succession • Climax community: The “final” stage of the succession consists of those plants that can reproduce successfully beneath their own shade and therefore maintain...
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...Legal Forms of Business Legal Forms of Business Entrepreneurs face a difficult decision in choosing a legal form of business. The preferred form of entity is dependent on many relative factors, such as the type of organization and business environment. Different forms of legal businesses have different tax, investment, and financial implications. The best-suited business calls for a thorough analysis of pertinent facts before making a decision – requiring some careful planning and strategy. This study provides an analysis of seven forms of legal business. Sole Proprietorship Sole proprietorships are fairly simple and inexpensive to create and operate. Legally, a sole proprietorship is inseparable from its owner, and therefore the owner is personally liable for business debts (Cheeseman, 2010). The tax implications for a sole proprietorship are simple. The business owner reports profits and losses on their personal tax returns. Sole Proprietorship is the preferred form of business in establishing or operating a small business where personal liability is not a big concern. Sole proprietors own businesses in many industries. Some of the more common sole proprietorships are landscaping services, housecleaning services, independent writing services, and tutoring services. * Landscapers tend to work alone or hire a small team of employees, providing landscaping services to homeowners and businesses. Sole proprietor may take on independent contracts and projects...
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...proprietor. With that stated, the losses are also those of the sole proprietor. Since there is no separation in the legal entity between the proprietor and the business, all personal assets become attached to the debt of the business. Another disadvantage can come at the time, or untimely of death of the proprietor. There is no automatic continuation of the business. The business becomes part of the owner’s estate and can become subject to probate and “death tax”. • Liability- You risk everything, there is no legal separation between the business and the individual owner. The owner risks all assets, home, car, everything in his/her name. Unlike a corporation, sole proprietorships have unlimited liability and the proprietor is legally responsible for all debts. • Income Taxes- All business related income or losses must be reported on the owner’s personal income tax return. The business is not separately taxed. Deductions are allowed for business expenses in the same manner as any other type of business. The owner is paid simply by making draws on the business’s checking account. At the end of the year all assets and liabilities belong to the owner, and all income and expenses for the tax year is “Pass-through” to the owner. • Longevity/Continuity- The concern here is that, if the owner fails to take appropriate legal actions, the business will automatically shut down upon his/her...
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...There are three legal forms of business: Sole Proprietorship, Partnership, and Corporation. The inventor scenario sounds like the business would start as a Sole Proprietorship since there are limited finances and the inventor’s net worth is low. However, with the new technology being introduced this business could quickly grow and eventually turn into a Partnership or possibly Corporation. A Sole Proprietorship is the easiest business to start with little overhead cost. All decisions are made by the proprietor, so no worries with disagreements since the proprietor is the boss and getting started doe not cost a lot. The downfall to being a Sole Proprietor is you are an extension of your business so if things start to fall apart your personal assets can be seized. The proprietor has to make sure they have taken all the necessary steps in education and training to make sure the business doesn’t look weak and not well managed. A Partnership is a great way to start a business with a friend or family member and luckily there is no set limit on the amount of partners one business can have so a whole class could start an amazing business. The important thing to remember about a partnership is that everyone, no matter the number is equally responsible for the debt created to run the business. Very different from the Sole Proprietorship where its one for all and the Partnership is all for one. The disadvantages of a Partnership include possibly not being able to mutually agree,...
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...Sole proprietorship The sole proprietorship is the simplest form of business entity. Single person carrying on a business for profit. The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. The sole proprietorship is a popular business form due to its simplicity, ease of setup, and nominal cost. A sole proprietor need only register his or her name and secure local licenses, and the sole proprietor is ready for business beginning and ending the business venture are uncomplicated steps requiring little more than the decision of the sole proprietor This can be an advantage, especially when the proprietor is not certain whether he or she will wish to continue the venture for any significant length of time and thus is unwilling to spend much money on filings, legal drafting, and the like. Disadvantages: The sole proprietorship does not have any legal existence separate from that of its owner. It also removes any shield from liability that might otherwise protect the proprietor. Thus, the proprietor is personally liable for all obligations of the business Partnership In contrast to general partnership law, a limited partnership is not dissolved by the death of a limited partner, and a limited partner may not compel dissolution of the partnership absent contrary provisions in the partnership agreement partners in general partnerships are jointly and severally liable for all obligations...
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...Chapter 4 LEGAL RESPONSIBILITIES OF THE INDEPENDENT AUDITOR Statutory Law A. Securities Act of 1933 B. Securities Exchange Act of 1934 C. RICO Act D. Private Securities Reform Act of 1995 I. Common Law A. Clients B. Third Parties C. Burden of Proof D. 1136 Tenants Case II. Terms A. Ordinary Negligence B. Gross Negligence C. Fraud D. Joint and Several Liability E. Proportionate Liability III. Limited Liability Partnerships vs. Limited Liability Corporations 4-1 Legal Responsibilities of the Independent Auditor I. Statutory Laws - Potential legal liability as defined by the Securities Act of 1933, the Securities Exchange Act of 1934, the Rico Act of 1970, and the Private Securities Litigation Reform Act of 1995. Questions concerning the Securities Acts of 1933 and 1934. 1. Describe the general purpose of each Act. 2. How does the auditor become subjected or exposed to each Act? 3. What are the specific provisions of each Act? Include in your discussion: -Who is the plaintiff? -Who has the burden of proof? -What civil or criminal penalties are provided by the Acts? A. Securities Act of 1933 1. Regulates the initial sale of securities in interstate commerce. 2. Auditor becomes subjected...
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