Clients Understanding Paper
Lawrence Murray
October 3, 2013
University of Phoenix
ACC/541
Michael Meyer
In today’s Society managing task in the work place is a very essential job function of an organization. There will be time were employees does not understand the importance of information on various topics. As a Staff employee, there must be precise communication with clients regarding topics that include adjusting lowering cost of market inventory on valuation, capitalizing interest on building construction, recording gain or loss on asset disposal and adjusting goodwill for impairment.
Market Inventory There are various ways to lower the market inventory on valuation. In some cases it is permissible to reduce the recorded value of inventory to the lower of its cost or market value, providing the goods are not being sold at a firm fixed price contract or if the LIFO valuation method is being used. Other factors that could also contribute to this are retail method, direct costing or obsolete inventory. Thus, I would present the possible scenarios to the client to make him aware and conscious of these variables.
Capitalizing Interest In regards to capitalizing interest on building construction, my line of questioning would be to ask my client exactly how long does he propose the building or establishment will take to complete and be ready for his purpose. There is a guideline for the calculation of the amount of interest to be capitalized and for the disclosures required in the financial statements. There must be three conditions for capitalization of interest. One is the qualifying expenditures must have already been made. Secondly the activities that will prepare the assets for use must already be in progress and lastly the company must actually be paying interest. The ending period for capitalization is when the asset I ready for use or when the previous conditions no longer exists. The client will need to know that even during
October 3, 2013
University of Phoenix
ACC/541
Michael Meyer
In today’s Society managing task in the work place is a very essential job function of an organization. There will be time were employees does not understand the importance of information on various topics. As a Staff employee, there must be precise communication with clients regarding topics that include adjusting lowering cost of market inventory on valuation, capitalizing interest on building construction, recording gain or loss on asset disposal and adjusting goodwill for impairment.
Market Inventory There are various ways to lower the market inventory on valuation. In some cases it is permissible to reduce the recorded value of inventory to the lower of its cost or market value, providing the goods are not being sold at a firm fixed price contract or if the LIFO valuation method is being used. Other factors that could also contribute to this are retail method, direct costing or obsolete inventory. Thus, I would present the possible scenarios to the client to make him aware and conscious of these variables.
Capitalizing Interest In regards to capitalizing interest on building construction, my line of questioning would be to ask my client exactly how long does he propose the building or establishment will take to complete and be ready for his purpose. There is a guideline for the calculation of the amount of interest to be capitalized and for the disclosures required in the financial statements. There must be three conditions for capitalization of interest. One is the qualifying expenditures must have already been made. Secondly the activities that will prepare the assets for use must already be in progress and lastly the company must actually be paying interest. The ending period for capitalization is when the asset I ready for use or when the previous conditions no longer exists. The client will need to know that even during
References: http://www.iasplus.com/en/resources/ifrsf/iasb-ifrs-ic/iasb Robbin, S. P., & Judge, T. A. (2011). Organizational behavior (14th ed.). Upper Saddle River, NJ: Pearson-Prentice Hall. Seitel. F. P. (2011). The practice of public relations. (11th ed.). Upper Saddle River, NJ: Pearson-Prentice Hall.