We have reviewed the accompanying balance sheet of XYZ Construction Co., Inc. as of December 31, and the related statements of income and retained earnings, and cash flows for the year then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of XYZ Construction Co., Inc. A review consists principally
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Statement of the problem: Trans-Share Inc is a marketer and operator of the fractional interest aircraft programs. The company is planning to issue initial public offering which enables the company to adapt new accounting practices and can also reevaluate the past financial reports to make it in line with the newly chosen methodology. The challenge for the company is how to account for the revenue it earned through sales and subsequent of fractional interest. Current revenue recognition method:
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in companies, such as airline with PP&E being a significant part of their assets, plays an important role in their accounting strategies. The large variation in the way of determining the depreciation expenses affects a company’s financial results and tax consequence largely. Applying reasonable yet favorable depreciation methods and assumptions is essential to a sound accounting practice. In the below comparison of the depreciation methods and assumptions used by Delta Airline and Singapore Airline
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operating and capital leases There are two primary types of leases: capital and operating. Capital leases are non-cancelable, and must meet at least one of the following requirements: the lease transfers ownership of the asset, the lease contains a bargain purchase option, the duration of the lease is 75% or more of the asset's expected economic life and/or the lease is worth at least 90% of the asset's value. An operating lease is one that meets none of the criteria. A capital lease is an example of
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|Profile: Company Background | | | | | | | |Example Company Inc. (Stock Symbol ***)
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clean on the value of leases in their books (50% - 50 poin) 1. Describe current accounting practices for leases as outlined in this article. Accountants distinguish between capital and operating leases. Capital leases go on the balance sheet while operating leases do not. Australian standards require that lease classification is based on the ‘substance’ of a transaction. However, the guidance criteria for what constitutes a capital lease (e.g. the requirements relating to the lease term covering a major
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Lease Financing Brigham and Daves Ch. 19 Christopher B. Alt CFA PhD Topics in Chapter Types of leases Tax treatment of leases Effects on financial statements Lessee’s analysis Lessor’s analysis Other issues in lease analysis 2 Who Are the Two Parties to a Lease Transaction? The lessee, who uses the asset and makes the lease, or rental, payments The lessor, who owns the asset and receives the rental payments Note that the lease decision is: a financing
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CONTEXT..............................................................3 THE IFRS FRAMEWORK ..............................................................................17 PRESENTATION OF FINANCIAL STATEMENTS ........................................35 ACCOUNTING POLICIES .............................................................................49 REVENUE......................................................................................................61 INVENTORIES................................
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Table of Content: Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Policies Principles of Consolidation Description of the Company New Accounting Pronouncements Cash and Cash Equivalent Inventories Investments Property, Plant and Equipment and Depreciation Earnings per Share Revenue Recognition Research and Development Use of Estimates Income Taxes Annual Closing Date 2. Cash, Cash Equivalents and Current Marketable Securities 3. Inventories 4. Property, Plant and
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(“Eagle”) recently entered into a contract with Tiger Company (“Tiger”) to lease a backhoe, which Eagle will use for a new project involving the construction of several apartment complexes in the Mobile area. The pertinent terms of the lease are as follows: • The lease term is for 10 years, while the economic life of the backhoe is estimated to be 15 years. The useful life of the backhoe is also estimated to be 15 years. • Annual lease payments of $16,000 are due at the end of each year. Eagle is also
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