The world possesses two main accounting systems: United States Generally Accepted Accounting Principles (U.S. GAAP) and International Generally Accepted Accounting Principles (iGAAP). As the acronym simply states, US GAAP are the guiding principles for the United States and iGAAP are principles used by other countries internationally. Across both systems are similarities in language, procedures and reporting but some of the differences are so major that it keeps a consistent debate on which system
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reporting attempts to measure the worth of assets, a concept that is inherently subjective and arbitrary. We can never know the true value of an asset, and rather than being an objective truth, valuations are always biased. Financial reporting is used for different purposes by different users and so each different way might be appropriate in different circumstances and values are affected by the purpose of measurement. Property, plant and equipment are the main non-current assets that a company holds.
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Case 04-8 DrugKing This case study involves determining the effects of call options and put options on the accounting for transfers of financial assets under ASC 860, Transfers and Servicing: Overall (ASC 860) (FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities (Statement 140)). The specific topics, highlighted in the examples below, include (1) attached call options on specific assets and freestanding call options on specific assets
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Executive Summary Accounting concepts are the rules and guidelines used in accountancy and one of these is the historical cost accounting. This concept is an accounting technique that values an asset on the balance sheet at the price paid for the asset at the time of its acquisition. Moreover, the historical cost accounting is the situation in which accountants record revenue, expenditure and asset acquisition and disposal at historical cost. This means the actual amounts of money, or money’s
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International Convergence of Accounting Standards is not new. At first, the convergence focused on the principles used in major capital markets around the world. By the 1990s, the idea of harmonization was replaced by the notion of convergence and the International Accounting Standards Committee was formed in 1973, which was the first international standards-setting body. The FASB and the IASB have been working together toward convergence since 2002. The Financial Accounting Standards Board believes
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also advised the following recognition criteria to be met before a liability could be shown on the face of a financial statement: * The outflow of resources embodying economic benefits (such as cash) from the entity is probable. * The cost / value of the obligation can be measured reliably. The minimum line items to be included on the face of the statement of financial position are: [IAS 1.54] (k) trade and other payables (l)provisions (m)financial liabilities (excluding amounts shown
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positive accounting theory (PAT) and compares it with three standard accounts of science. There is some confusion about what PAT is. If the definition of accounting theory (i.e., accounting theory seeks to explain and predict accounting and auditing practice) given in Watts and Zimmerman’s 1986 book is taken to mean PAT, studies of accounting choices and auditing practices constitute PAT. At the same time, they also seek to explain the economics-based empirical literature in accounting and they
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Scott, Financial Accounting Theory, 6th Edition Instructor’s Manual Chapter 2 Suggested Solutions to Questions and Problems 1. P.V. Ltd. Income Statement for Year 2 Accretion of discount (10% × 286.36) $28.64 P.V. Ltd. Balance Sheet As at Time 2 Financial Asset Cash $315.00 Shareholders’ Equity Opening balance Net income Capital Asset Present value 0.00 $315.00 $315.00 $286.36 28.64 Note that cash includes interest at 10% on opening cash balance of $150. 2. Suppose that P.V. Ltd
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Software—Revenue Recognition, from the FASB Accounting Standards Codification®, is copyrighted by the Financial Accounting Foundation, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116, and is reproduced with permission. SOP 97-2: Copyright 1997–2009 by American Institute of Certified Public Accountants, Inc. Used with permission. This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax
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some information regarding this investment. With some research, it has been found that the fair value of Teton’s stock is readily determinable despite the fact that the stocks are not traded on one of the large stock markets. An issue that can arise sometime in the future from this security is an impairment and as long as the decline in fair value it is anything other than temporary, the fair value of the security can be written down. Also included in this memo is information concerning held
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