Adoptation of Accounting Stanndards in Financial Statements- Intermediate Financial Statement 1
1) INTRODUCTION
The purpose of this assignment is to develop learners’ analytical skills in reviewing the adoption of accounting standards in financial statements. In this assignment we are required to assess the accounting treatment of borrowing costs as per FRS 123, by using the latest two years financial statements for two companies listed on the Maldives Stock exchange.
Financial Reporting Standard 123 Borrowing Costs (FRS 123) consists of paragraphs 1 to 30. All of the paragraphs in FRS123 have equal authority. FRS 123 should be read in the context of its core principle and the Basis. The companies should follow FRS 123 when preparing company’s financial statements and disclosing information regarding borrowing costs.
The core principle of FRS 123 is borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset. Other borrowing costs are recognised as an expense.
According to FRS 123 an entity shall apply this Standard in accounting for borrowing costs. The Standard does not deal with the actual or imputed cost of equity. An entity is not required to apply the Standard to borrowing cost directly attributable to the acquisition, construction or production of a qualifying asset measured at fair value and the inventories that are produced repetitively in large amounts.
The two companies that I have selected to do this assignment are Maldives Transport and Contracting Company Plc (MTCC) and State Trading Organization (STO).
MALDIVES TRANSPORT AND CONTRACTING COMPANY PLC (MTCC)
The first public company in Maldives was incorporated in the year 1980. Maldives Transport and Contracting Company Plc (MTCC) is the very first public company in Maldives. It was incorporated on 18 December 1980.
The good mission, vision and proper core values are the major success of the company. MTCC’s mission is to contribute fully, to the development of the economy and the
The purpose of this assignment is to develop learners’ analytical skills in reviewing the adoption of accounting standards in financial statements. In this assignment we are required to assess the accounting treatment of borrowing costs as per FRS 123, by using the latest two years financial statements for two companies listed on the Maldives Stock exchange.
Financial Reporting Standard 123 Borrowing Costs (FRS 123) consists of paragraphs 1 to 30. All of the paragraphs in FRS123 have equal authority. FRS 123 should be read in the context of its core principle and the Basis. The companies should follow FRS 123 when preparing company’s financial statements and disclosing information regarding borrowing costs.
The core principle of FRS 123 is borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset. Other borrowing costs are recognised as an expense.
According to FRS 123 an entity shall apply this Standard in accounting for borrowing costs. The Standard does not deal with the actual or imputed cost of equity. An entity is not required to apply the Standard to borrowing cost directly attributable to the acquisition, construction or production of a qualifying asset measured at fair value and the inventories that are produced repetitively in large amounts.
The two companies that I have selected to do this assignment are Maldives Transport and Contracting Company Plc (MTCC) and State Trading Organization (STO).
MALDIVES TRANSPORT AND CONTRACTING COMPANY PLC (MTCC)
The first public company in Maldives was incorporated in the year 1980. Maldives Transport and Contracting Company Plc (MTCC) is the very first public company in Maldives. It was incorporated on 18 December 1980.
The good mission, vision and proper core values are the major success of the company. MTCC’s mission is to contribute fully, to the development of the economy and the