DEFENCE OF HISTORICAL COST ACCOUNTING i. Historical cost is relevant in making economic decisions. * Ijiri present 3 reasons historical cost is relevant for making decision * It effect the evaluation n selection of decision rules. It used the past info to measures the quality of their past decisions. * Provides input for satisficing notion where some managers make decisions that will support expected or satisfactory outcome. They are consider how much has already earned rather
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business, it’s difficult to select a base for organization as well as difficult to compare. * Allocation of Common Costs: Common costs are likely to be allocated, bringing segment information into question * Pricing Inter-segment Transaction: No specific method for inter-segment pricing, different method use for cost, cost plus market price and negotiable price. * Costs of Segment Disclosure: Increased competition may result segmental disclosures where profitable segment may attract competitors
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the recognition, measurement and other current issues in financial reporting. COURSE OUTLINE |Week |Topic |Contact Hours |Learning Levels|References | | | | | | | |1 |Historical development of accounting
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Overview “Price is what you pay. Value is what you get” VALUATI O N O V E R VI EW Value ! Price Do not confuse Price and Value. They are not the same If the Price paid is less than the Value derived, it’s a good investment VAIDYA NATHAN 2 Overview Why valuation is important? Divestitures Acquisitions How much should we pay to buy the company? How much should we sell our company/division for? Fairness opinions Research Is the price offered for
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“ the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measure date”. (Financial Accounting Series, 2006) In IFRS13 dictate the measurement, which is market value, meaning assets and liabilities should be adjusted to a value which reflect the actual market value. On the fair value basis, balance sheet provides timely and reliable information as compared to other measurement basis like historical cost. Similar
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The RAND Corporation Contestability in Real-Time Experimental Flow Markets Author(s): Edward L. Millner, Michael D. Pratt, Robert J. Reilly Source: The RAND Journal of Economics, Vol. 21, No. 4 (Winter, 1990), pp. 584-599 Published by: Blackwell Publishing on behalf of The RAND Corporation Stable URL: http://www.jstor.org/stable/2555470 Accessed: 15/04/2009 04:27 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms
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SCP Model This chapter covers the Structure-Conduct-Performance (SCP) model. we have embraced this model as our primary integrating framework to conduct situation analyses during strategy engagement. The chapter covers two topics. ¶SCP model overview ¶Client applications The Structure-Conduct-Performance (SCP) model, which has been supported by extensive academic research, asserts that the performance of individual firms is determined wholly by the conduct of participants in that industry (including
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Fair Value Accounting: The Road to Be Most Travelled By Rock Lefebvre, Elena Simonova and Mihaela Scarlat Fair Value Accounting: The Road to Be Most Travelled By Rock Lefebvre, Elena Simonova and Mihaela Scarlat December 2009 Sponsored by the Certified General Accountants Association of Ontario Introduction ................................................................................................................................ Fair Value Accounting – An Overview.............
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BAO3309 Individual Research Assignment 2015 1. The measurement concepts in relation to historical cost and fair value accounting. IASB framework defines that measurement is the process to determine the monetary amount of the financial statements’ elements are to be recognized and carried on the balance sheet and income statements ( IASB Framework 2010). 1.1 Historical cost Historical cost is an accounting method about the original nominal monetary value of an economic item at the time
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Transaction Analysis | 20% | $2.30; Range of $1.47 - $3.66 | | Value Range | $1.47 - $3.66 | | Estimated Price | $2.43 | | Market Price (04/19/13) | $2.40 | | Conclusion | Slightly Undervalued* | | Recommendation | Hold | * It should be noted that since the analysis was completed the stock price has risen to $2.76; however, certain data used in the analysis that is affected by price was pulled as of 04/19/13. Summary: Based on the weighted valuations that I performed, Pacific Sunwear’s
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