of Business 1. Understand the mechanics of revaluing assets. 2. Understand the mechanics of impairment testing. 3. Revisit the accounting treatment of inventory. ACCT1511 4. Be technically competent in journal entries and T-accounts relevant to asset revaluation, intangible assets, and inventory measurement. Topic 5. Be able to identify the accounting principles relevant to the accounting treatment of assets. Assets (2) General Principles Methods for Measuring Value
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|FRAMEWORK | | |U.S. GAAP |IFRS |Similarities | |Purpose of Framework |The FASB framework resides lower in hierarchy. |Management is explicitly required to |Both the frameworks are similar in | | |Management
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RECOGNITION OF ASSETS Accountants define assets as resources that a firm owns or controls as a result of past business transactions, and which are expected to produce future economic benefits that can be measured with a reasonable degree of certainty. Distortions in asset values generally arise because there is ambiguity about whether: * The firm owns or controls the economic resources in question: * Are the ventures controlled? * Are the leased assets owned by the lessee
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operates three manufacturing facilities as an SEC registrant. Company emission allowances of vintage years are granted by U.S government to be used 2010 and 2030. According to the Federal Energy Regulatory Commission, Polluter Corp. recorded EAs as intangible assets with a zero cost basis when government issued EAs to company and has a fiscal year end of December 31. Government has special guidance to control or reduce the emission of pollutants and greenhouse gases to participating companies. These are
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software be classified as an intangible asset or part of property, plant and equipment? In accounting terms, an intangible asset is something of value that is not of physical nature. On the other hand, property, plant and equipment (PPE) are just as the name suggests. PPE refers to physical long-term assets, such equipment that is vital to a company's operations and has a definite physical component. Under most circumstances, computer software is classified as an intangible asset because of its non physical
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There are many internal and external factors that can impact a company’s stock price and its perceived value. By referring to a company’s balance sheet and subtracting the liabilities from the assets, one can determine the book value of a company. However, the book value of the company is not likely to be the actual stock price because investors’ purchase decisions are more likely to be influenced by both the present and future performance of a company. For example, in 2010, Amazon’s book value per
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Occurring after the Balance Sheet Date’ covers accounting treatment of ∗ Pursuant to AS 29, “Provisions, Contingent Liabilities and Contingent Assets’ becoming mandatory in respect of accounting periods commencing on or after 1.4.2004, all paragraphs of this standard that deal with contingencies stand withdrawn except to the extent they deal with impairment of assets not covered by other Indian Accounting Standards. For example, impairment of receivables (i.e. provision
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to be accurate and verifiable and the essay discourses some key areas in financial accounting where judgement is required to be applied. The financial statements of an enterprise comprises of primarily the balance sheet that summarises the assets, liabilities and shareholder’s equity at the end of a year or a specified period (quarter / half year etc.), the income statement also known as the profit and loss statement summarises the revenues and expenditures incurred during a specified period
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J.Chase Case Assignment #1 Questions Chemalite, Inc. MGT 404 , Accounting 2015 a. Journal Entries Date | Entry | Debit | Credit | 2-Jan | Cash | | 375,000 | | | Intangible Assets | 125,000 | | | | Common Equity | | 500,000 | 12-Jan | Administrative Expense | 7,500 | | | | Cash | | 7,500 | 15-Jun | PPE | | 62,500 | | | | Cash | | 62,500 | 24-Jun | Inventory | 75,000 | | | | Cash | | 75,000 | 30-Jun | Retained Earnings | 7,500 | | | | Administrative Expense
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Trading Schemes” 2). The first accounting conflict arises from the nature of these allowances. They could be considered assets held for use, grants from the government for the value of the allowances, or a liability/promise to deliver allowances equal to the emissions that have been made. Considering this, emission allowances can not be categorized as either net assets or net liabilities. Due to the lack of authority, accounting practitioners create diversity (“Emission Trading Schemes” 5). Two
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