Case 11-6 deals with Lessee Ltd., a company that operates in Britain and uses IFRS. The question in this case is how to classify a lease that Lessee, Ltd. acquired from Lessor Inc. The accounting standard that deals with leases under IFRS is IAS 17. IAS 17 was originally issued in September 1982 and was reissued in December 2003. It classifies leases as either finance leases or operating leases. Finance leases make it so that the lessee recognizes an asset and a liability and the lessor recognizes a receivable, basically transferring all the risks and benefits of ownership. Under operating leases, the lessor still recognizes the asset and the lessee recognizes an expense.…
1. (TCO A) An alternative available when the seller is exposed to continued risks of ownership through return of the product is (Points : 6)…
Principle violated- Divide responsibilities for related transactions and separate recordkeeping from custody of assets. The business will need to separate the duties of Ms. Flat. She is currently recording all cash receipts and posting the payments to the customer accounts. This leaves much room for error and fraud. Ms. Flat also has control or access over all cash receipts as well as being responsible for posting the payment to accounts. 2.…
1. In 1932, the federal government’s intervention in the market for home ownership was desirable. Not only was it desirable, but it was needed. It has been the federal government’s desire to have every American become a part of the American dream and be a homeowner. In 1932 President Hoover signed the Federal Home Loan Bank Act to establish a series of discount banks for home mortgages. This would assist in increasing the likelihood of Americans owning a home and not feeling that they were restricted because of financial pressures. Fannie Mae, Ginnie Mae, Freddie Mac were created to help bail out banks that had a growing number of defaults in mortgages. These three enterprises made it possible for banks to offer mortgages to riskier clients who normally would not…
It is our understanding that you will be assuming responsibility of this file through the appraisal process. In the event that this is not true, we are coping Ms. Crancer and Mr. Spevacek. The purpose of this correspondence is to reply to their correspondence dated March 3, 2017. Please note the following, in the order of the inquiries presented:…
1. Yes and yes. The bank had a valid security interest in all of Able's equipment, including after-acquired equipment. After-acquired clauses are valid. The only question is whether the bank's security interest could attach to the backhoe. Attachment requires that the debtor has rights in the collateral. This doesn’t necessarily mean that the debtor must own the goods. Ablest had the lawful use and possession of the backhoe, based on his purchase agreement with Myers. He then would have had rights in the backhoe, and as soon as he took possession of it, the bank's security interest would be attached. Because of this, the bank will get the backhoe.…
John Silber, the President of Boston University, submitted an article to the New York Times; opening the eyes of many people to an ongoing problem which was not receiving the proper attention. In this article titled, “Students Should Not be above the Law” Mr. Silber jumps into a subject that has yet been touched. Dr. Silber talks about the problem with colleges and universities avoiding the courts and suppress serious criminal cases in their own judicial systems.…
This case shows how a large corporation can appreciate innovation as their new organizational culture. For a bank that based its expansions on geographical spread, mergers & acquisitions & revenue growth, to change to a culture based on innovation is not an easy task but is a step in the right direction. However, with the advent of the financial crisis in 2008, consumers have lost faith in financial innovations and it would take BBVA time & resources to instill consumer confidence & trust in innovation in the banking industry.…
The Sarbanes–Oxley Act of 2002 (Pub.L. 107–204, 116 Stat. 745, enacted July 30, 2002), also known as the 'Public Company Accounting Reform and Investor Protection Act' (in the Senate) and 'Corporate and Auditing Accountability and Responsibility Act' (in the House) and more commonly calledSarbanes–Oxley, Sarbox or SOX, is a United States federal law that set new or enhanced standards for all U.S. public company boards, management and public accounting firms. It is named after sponsors U.S. Senator Paul Sarbanes(D-MD) and U.S. Representative Michael G. Oxley (R-OH). As a result of SOX, top management must now individually certify the accuracy of financial information. In addition, penalties for fraudulent financial activity are much more severe. Also, SOX increased the independence of the outside auditors who review the accuracy of corporate financial statements, and increased the oversight role of boards of directors.[1]…
E(R) = α + Rf + β (RM - Rf) + βs ∙ SMB + βh ∙ HML + βu ∙ UMD +…
During the fall of 1988, staff members of a public hospital located in the city of Charleston by the Medical University of South Carolina (MUSC) became concerned by “an apparent increase in the use of cocaine by patients who were receiving prenatal treatment.” (Samaha, 2012, p. 252) In response to the increasing number, in April of 1989, MUSC instituted a drug testing policy. Women who came into MUSC that presented suspicion of drug use were subjected to the drug screenings. If the tests were positive, it was reported to police and the women were subsequently arrested. MUSC worked in conjunction with the Solicitor for Charleston in the prosecution of mothers whose children tested positive for drugs at birth.…
This case involves an investigation of the factors that affect the sale price of Oceanside condominium units. It represents an extension of an analysis of the same data by Herman Kelting (1979). Although condo sale prices have increased dramatically over the past 20 years, the relationship between these factors and sale price remain about the same. Consequently, the data provide valuable insight into today’s condominium sales market.…
What are the benefits of debt for UST? How do you calculate the value of these benefits? Use a corporate tax rate of 38% to value the tax shields.…
The stockholders would be better off with expansion because the value of the company would increase by 4,5000,000. As the pie model shows on page 467, the shareholders and bondholders received the majority of the firm, therefore higher numbers in regards to the value of the company would be in their best interest.…
Pat was very frustrated because she wanted to purchase a home but lacked the funds or credit to do so even though Pat was expecting shortly to receive a one-half million dollar final installment payment for some land she sold several years earlier. Dan knew that Pat was very interested in purchasing a home and approached Pat with a proposal to assist Pat in buying a home. Dan told Pat that he would help Pat with the financing. After finding the home she wanted to buy for $250,000, Dan and Pat orally agreed that Dan would purchase the home and "when you come up with the money, I (Dan) will sell it to you (Pat) for $250,000 plus a fair commission to be determined."…
