...There are still many differences in accounting treatment between International financial reporting standards (IFRS) and the U.S Generally Accepted Accounting Principles (GAAP). While IFRS are widely used by many countries around the world, FASB of the U.S still working on the intention of either adopt the IFRS or converge towards it. Until the convergence actually happens, there are still many critics about the accounting treatment at the same subject under U.S GAAP and IFRS. Example of this is the argument about whether U.S GAAP should allow upward revaluation of non-financial asset of IFRS which was described in details on the article “Upward Revaluation of Non-financial” in the CPA journal November 2012 by David Sardone and Tom Tyson. Base on the article, this paper will explore further the comparison of the IFRS standard for accounting treatment for Property Plant Equipment with the treatment of available-for-sale investments under GAAP, along with the support about the authors’ suggestion about the US GAAP’s adoption of IFRS treatment to the property, plant, equipment especially with those have lives in excess of ten years. Even though many differences between IFRS and U.S GAAP exist and can be the critic target for U.S companies, there are still similarities from these two accounting standards. Asset held for sale under GAAP is defined as those which meet the following criteria: “It must be available for immediate sale in its present condition; the entity is actively trying...
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...Objective The objective of IAS 16 is to prescribe the accounting treatment for property, plant, and equipment. The principal issues are: the timing of recognition of asset; the determination of their carrying amounts; and The depreciation charges to be recognized. Scope IAS-16 applied to all Property, Plant & Equipment until and unless any other standard requires or permits a different accounting treatment. Definition Property, Plant & Equipment are tangible items that: are held for use in the production or supply of goods or services; for rental to others; for administrative purposes; and are expected to be used during more than one period. Recognition The cost of an item or Property, Plant & Equipment shall be recognized as an asset if, and only if: it is probable that future economic benefits associated with the item will flow to the entity; and The cost of the item can be measured reliably. Measurement at Recognition An item of Property, Plant & Equipment that qualifies for recognition as an asset shall be measured at its cost. Elements of Cost Purchase price + (Import duties + Non refundable taxes) - (Trade Discounts + Rebates) Directly attributable costs. Initial estimate of the cost of dismantling and removing the item and restoring the site in which it is located. Costs that are not Costs of Property, Plant & Equipment Costs of opening new facility; Costs of introducing new product or service; Costs of conducting business in new location or with...
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...Disposition of Property, Plant, and Equipment ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics 1. Valuation and classification of land, buildings, and equipment. Self-constructed assets, capitalization of overhead. Capitalization of interest. Exchanges of assets Questions 1, 2, 3, 4, 6, 7, 12, 13, 21 5, 8, 20, 21 8, 9, 10, 11, 2, 3, 4 13, 21 12, 16, 17 8, 9, 10, 11, 12 5, 6, 7 Brief Exercises 1 Exercises 1, 2, 3, 4, 5, 13 4, 6, 12, 16 4, 5, 7, 8, 9, 10, 16 3, 11, 16, 17, 18, 19, 20 1, 5, 6, 7 4, 8, 9, 10, 11 Problems 1, 2, 3, 5 Concepts for Analysis 1, 6, 7 2. 3. 4. 2 3, 4 5 5. Lump-sum purchases, issuance of stock, deferredpayment contracts. Costs subsequent to acquisition. Alternative valuations. Disposition of assets. 12, 14, 15 3, 6, 11, 12, 2, 11 13, 14, 15, 16 21, 22, 23 3 1 6. 7. 8. 18, 19 22 23 13 14, 15 24, 25 4 1 Copyright © 2010 John Wiley & Sons, Inc. Kieso, Intermediate Accounting, 13/e, Solutions Manual (For Instructor Use Only) 10-1 ASSIGNMENT CLASSIFICATION TABLE (BY LEARNING OBJECTIVE) Learning Objectives 1. 2. 3. 4. 5. Describe property, plant, and equipment. Identify the costs to include in initial valuation of property, plant, and equipment. Describe the accounting problems associated with self-constructed assets. Describe the accounting problems associated with interest capitalization. Understand accounting issues related to acquiring and valuing plant assets. Describe the accounting treatment for costs...
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...CHAPTER 10 Acquisition and Disposition of Property, Plant, and Equipment ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises 1, 2, 3, 4, 5, 13 Concepts Problems for Analysis 1. Valuation and classification of land, buildings, and equipment. 1, 2, 3, 4, 6, 7, 12, 13, 15, 21 2. Self-constructed assets, capitalization of overhead. 5, 8, 20, 21 4, 6, 12, 16 3. Capitalization of interest. 8, 9, 10, 11, 2, 3, 4 13, 21 4, 5, 7, 8, 9, 10, 16 1, 5, 6, 7 3 4. Exchanges of assets. 12, 16, 17 8, 9, 10, 11, 12 3, 11, 16, 17, 18, 19, 20 4, 8, 9, 10, 11 4 5. Lump-sum purchases, issuance of stock, deferredpayment contracts. 12, 14 5, 6, 7 3, 6, 11, 12, 2, 11 13, 14, 15, 16 6. Costs subsequent to acquisition. 18, 19 13 21, 22, 23 7. Alternative valuations. 22 8. Disposition of assets. 23 Copyright © 2013 John Wiley & Sons, Inc. 1 Exercises 1, 2, 3, 5 1, 5, 6 2 1 3 14, 15 24, 25 Kieso, Intermediate Accounting, 15/e, Solutions Manual 4 1 (For Instructor Use Only) 10-1 ASSIGNMENT CLASSIFICATION TABLE (BY LEARNING OBJECTIVE) Learning Objectives Questions Brief Exercises Concepts for Analysis Exercises Problems 1, 2, 3, 4, 5, 11, 12, 13 1, 2, 3, 4, 5, 6, 11 CA10-1 4, 5, 6, 11, 12 3 CA10-2 1. Describe property, plant, and equipment. 1 2. Identify the costs to include...
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...Introduction Basically, the study is on the differences of Generally Accepted Accounting Principles (GAAP) influence in property management industry. The study focuses on two basic accounting principles in valuing assets, which are fair value and historical cost. The property refers to the land and building, as those are the main part of total fixed assets of a company. Asset is the most important element in the balance sheet, hence the method used for assets valuation is very important to avoid over or under estimation. This is the reason why the choice for measurement method is importance in determining the value of assets because it will affects the acquisition price and the comprehensive income of the firm in terms off income and shareholder equity. The author too focuses on the accounting treatment in accordance to International Financial reporting Standard (IFRS), US GAAP and Greek GAAP. With reference to the article, asset can be defined as a good able to provide a constant flow of services such as housing services and a source of cash flow. Assets are ruled by a set of basic aspects such as the cost (cost of land or construction cost), the residual value, the useful life estimation and depreciation charge. These elements are correlated with the type and use form of assets. The author also apply some accounting principles in their study such as prudence, historical costs, substance over form, going concern, true and fair view and many more. Data Methodology/approach ...
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...Apple, Inc Financial Analysis Report Daunshae' Willrich Intermediate Accounting II Professor Wendy Achilles Apple Inc. designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players. The company also sells various related software, services, peripherals, networking solutions, and third-party digital content and applications. Products The company’s products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and OS X operating systems, iCloud, and various accessory, service, and support offerings. The company also sells and delivers digital content and applications through the iTunes Store, App Store, iBooks Store, and Mac App Store. In addition, the company sells various third-party iPhone, iPad, Mac, and iPod compatible products, including application software, and various accessories, through its online and retail stores. iPhone iPhone is the company’s line of smartphones that combines a phone, music player, and Internet device in one product, and is based on the company’s iOS Multi-Touch operating system. Table of Contents Analysis Annual Report for Apple, Inc...........................................................................................1 Works Cited........................................................................................................................... The position of this research paper...
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...Exposure Draft Accounting Standard (AS) 9 (Revised 20XX) (Corresponding to IAS 18) Revenue (Last date for Comments: June 07, 2010) Issued by Accounting Standards Board The Institute of Chartered Accountants of India 2 Exposure Draft Accounting Standard 9 (Revised 20XX) (Corresponding to IAS 18) Revenue Contents Objective Scope Definitions Measurement of revenue Identification of the transaction Sale of goods Rendering of services Interest, royalties and dividends Disclosure Effective date 1–6 7–8 9–12 13 14–19 20–28 29–34 35–36 37–39 Paragraphs Appendices A Revenue—Barter Transactions Involving Advertising Services (Corresponding to SIC 31) Customer Loyalty Programmes (Corresponding to IFRIC 13) Agreements for the Construction of Real Estate (Corresponding to IFRIC 15) Transfers of Assets from Customers (Corresponding to IFRIC 18) B C D 3 E References to matters contained in other Accounting Standards F Illustrative examples Sale of goods Rendering of services Interest, royalties and dividends Recognition and measurement G H Comparison with IAS 18, Revenue Major differences between the Exposure Draft of AS 9 (Revised 20XX), Revenue, and the existing AS 9 (Issued 1985) 4 INVITATION TO COMMENT The Accounting Standards Board of the Institute of Chartered Accountants of India invites comments on any aspect of this Exposure Draft of the Accounting Standard (AS) 9 (Revised 20XX), Revenue. The Board would particularly welcome answers...
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...Revenue recognition is covered under ASPE – section 3400 (Revenue): Private entities opting to use the ASPE for revenue recognition should use the ASPE guidance. The standard covers the sale of goods and the rendering of services by an entity in the ordinary course of business. Definition: * Revenue is the cash, receivables and other consideration coming into the business from its ordinary business activity. * The completed contract method recognizes revenue when the good or service has been sold/rendered and the contract is substantially complete. * The percentage of completion method recognizes revenue proportionately with the degree of completion of the service/product. Revenues are recognized when a performance is achieved and reasonable assurance regarding measurability and collectability of consideration exists. Performance is achieved when: Transferred significant risks and rewards of ownership; i.e. * All significant acts have been completed * NO continuing involvement in or control over the goods * Reasonable assurance regarding measurement of consideration and extent of returns In general for goods and services performance is achieved when all are met; * Persuasive evidence of a an arrangement exists * Delivery has occurred or services have been rendered * The seller’s price is fixed or determinable. Consolidation: Section 1582 – Business combination A business combination is: A transaction or event in which an acquirer...
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...Chapter 10 Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments, and faculty may approach assessment and its documentation differently, one approach is to provide specific questions on exams that become the basis for assessment. To aid faculty in this endeavor, we have labeled each question, exercise, and problem in Intermediate Accounting, 7e, with the following AACSB learning skills: |Questions |AACSB Tags |Brief Exercises |AACSB Tags | |10–1 |Reflective thinking |10–13 |Analytic | |10–2 |Reflective thinking |10–14 |Analytic | |10–3 |Reflective thinking |10–15 |Analytic | |10–4 |Reflective thinking |10–16 |Analytic | |10–5 |Reflective thinking |Exercises cont. |AACSB Tags | |10–6 |Reflective thinking ...
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...9 INTANGIBLE ASSETS PERSPECTIVE AND ISSUES Long-lived assets are those that will provide economic benefits to an enterprise for a number of future periods. Accounting standards regarding long-lived assets involve determination of the appropriate cost at which to record the assets initially, the amount at which to present the assets at subsequent reporting dates, and the appropriate method(s) to be used to allocate the cost or other recorded values over the periods being benefited. Under international accounting standards, while historical cost is the defined benchmark treatment, revalued amounts may also be used for presenting long-lived assets in the statement of financial position if certain conditions are met. Long-lived assets are primarily operational in character, and they may be classified into two basic types: tangible and intangible. Tangible assets have physical substance, while intangible assets either have no physical substance, or have a value that is not conveyed by what physical substance they do have (e.g., the value of computer software is not reasonably measured with reference to the cost of the diskettes on which these are contained). The value of an intangible asset is a function of the rights or privileges that its ownership conveys to the business enterprise. Intangible assets can be further categorized as either 1. Identifiable, or 2. Unidentifiable (i.e., goodwill). Identifiable intangibles include patents, copyrights, brand names, customer...
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...T 3. Depreciation, depletion, and amortization. T 4. Definition of depreciation base. F 5. Factors involved in depreciation process. F 6. Definition of inadequacy. T 7. Objection to straight-line method. F 8. Units-of-production approach. F 9. Accelerated depreciation method. T 10. Declining-balance method. T 11. Group or composite approach. F 12. Use of the composite approach. T 13. Accounting for changes in estimates. F 14. Computation of impairment loss amount. T 15. First step in determining an impairment. T 16. Reporting impaired assets held for disposal. F 17. Method used to compute depletion. T 18. Costs included in depletion base. F 19. Computing asset turnover ratio. T 20 Profit margin on sales ratio. Multiple Choice—Conceptual Answer No. Description d 21. Knowledge of depreciation accounting. b 22. Conceptual rationale for depreciation accounting. c 23. Depreciation and retaining funds. b S24. Definition of depreciation. a S25. Service life vs. physical life. a P26. Definition of depreciable cost. d 27. Economic factors affecting useful service life. d 28. Factors involved in computing depreciation. d 29. Straight-line method assumption. a 30. Activity method of depreciation. a 31. Units-of-production method of depreciation. d 32. Units-of-production method of depreciation. d 33. Knowledge of double-declining balance method. c 34. Components of sum-of-the-years'-digits method. c 35. Graphic depiction...
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...Cited……………………………………………………………………………………………page 9 Dell Inc: A Major Competitor in the Computer Business Introduction Dell is a global information technology company that offers its customers a broad range of solutions and services delivered directly by Dell and through other distribution channels. They are focused on providing technology solutions that are more efficient, more accessible, and easier to manage. Dell built its reputation as a leading technology provider through listening to customers and developing solutions that meet customer needs. A few years ago, they initiated a broad transformation of the company to become an end-to-end technology solutions company. Amortization and Depreciation In 2010, Dell’s Property, Plant, and Equipment (PP&E) was $2,181 million; the following year it plummeted to $1,953 million and then rebounded back to $2,124 million in 2012. With having PP&E, Dell has to account for the PP&E’s amortization and depreciation expenses. Dell keeps very close account of these expenses on the books as well. The amortization expense is the same as the depreciation expense for Dell. Amortization is primarily used when the asset in question is a large one that will affect the financial statements for the period during which, without amortization procedures, it would have to be recorded. This...
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...Statement of Financial Accounting Standards No. 13 FAS13 Status Page FAS13 Summary Accounting for Leases November 1976 Financial Accounting Standards Board of the Financial Accounting Foundation 401 MERRITT 7, P.O. BOX 5116, NORWALK, CONNECTICUT 06856-5116 Copyright © 1976 by Financial Accounting Standards Board. 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 the prior written permission of the Financial Accounting Standards Board. Page 2 Statement of Financial Accounting Standards No. 13 Accounting for Leases May 1980 CONTENTS Paragraph Numbers Introduction ................................................................................................................ 1– 4 Standards of Financial Accounting and Reporting: Definitions of Terms .................................................................................................. 5 Classification of Leases for Purposes of This Statement ........................................... 6 Criteria for Classifying Leases (Other Than Leveraged Leases).......................... 7– 9 Accounting and Reporting by Lessees .............................................................. 10– 16 Accounting and Reporting by Lessors............................................................... 17– 23 Leases Involving Real Estate.........................
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...JWCL165_c09_396-443.qxd 8/4/09 9:39 PM Page 396 Chapter 9 Plant Assets, Natural Resources, and Intangible Assets STUDY OBJECTIVES After studying this chapter, you should be able to: 1 Describe how the cost principle applies to plant assets. 2 Explain the concept of depreciation. 3 Compute periodic depreciation using different methods. 4 Describe the procedure for revising periodic depreciation. 5 Distinguish between revenue and capital expenditures, and explain the entries for each. 6 Explain how to account for the disposal of a plant asset. 7 Compute periodic depletion of natural resources. 8 Explain the basic issues related to accounting for intangible assets. 9 Indicate how plant assets, natural resources, and intangible assets are The Navigator reported. ✓ The Navigator Scan Study Objectives Read Feature Story Read Preview Read text and answer p. 402 ■ ■ ■ ■ p. 409 ■ Do it! p. 412 Do it! ■ p. 417 ■ ■ ■ ■ ■ ■ Work Comprehensive p. 421 p. 422 Review Summary of Study Objectives Answer Self-Study Questions Complete Assignments ✓ Feature Story HOW MUCH FOR A RIDE TO THE BEACH? It’s spring break. Your plane has landed, you’ve finally found your bags, and you’re dying to hit the beach—but first you need a “vehicular unit” to get 396 JWCL165_c09_396-443.qxd 7/31/09 4:20 PM Page 397 you there. As you turn away from baggage claim you see a long row of rental agency booths. Many are names you are familiar...
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...Graham Peirson ... [et al.] Business Finance. 11th edition. North Ryde, N.S.W. : McGraw-Hill, 2012. ISBN 9780070997592 Chapter 15 pages 488-515 CHAPTER CONTENTS 15.1 Introduction 15.2 Types of lease contracts 15.3 Accounting and taxation treatment of leases 15.4 Setting lease rentals 15.5 Evaluation of finance leases 15.6 Evaluation of operating leases 15.7 Advantages and disadvantages of leasing 15.8 Chattel mortgages and hire-purchase Graham Peirson ... [et al.] Business Finance. 11th edition. North Ryde, N.S.W. : McGraw-Hill, 2012. ISBN 9780070997592 Chapter 15 pages 488-515 INTRODUCTION When most people think of leasing, they probably think of something like hiring a car for the weekend or leasing an apartment for 6 months. While such contracts are indeed leases, there is another form of lease, known as a finance lease, which uses the legal form of leasing in such a way that it becomes an alternative to borrowing funds to purchase new assets. In this chapter, we consider the various forms of leases and explain how a proposed lease may be evaluated. We also consider chattel mortgages and hire purchase, which, together with leasing, are known as 'equipment finance'. Leasing is distinguished from most other forms of finance by the fact that the financier (the lessor) is the legal owner of the leased asset. The asset user (the lessee) obtains the right to use the asset in return for periodic payments (lease...
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