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With Reference to the Measurement of Tangible Non-Current Assets, Critically Evaluate Whether Financial Statements Prepared Using Ifrs’s Provide Useful Information. Use Specific Examples from the Annual Reports of Ftse

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With Reference to the Measurement of Tangible Non-Current Assets, Critically Evaluate Whether Financial Statements Prepared Using Ifrs’s Provide Useful Information. Use Specific Examples from the Annual Reports of Ftse
University of Hertfordshire | 6BUS1003 – Advanced Corporate Reporting | With reference to the measurement of tangible non-current assets, critically evaluate whether financial statements prepared using IFRS’s provide useful information. Use specific examples from the annual reports of FTSE 100 companies to illustrate your points. | | | 3rd December, 2012 |

Word Count: 2004 |

As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the qualitative characteristics set out by the International Accounting Standards Board (IASB). The IASB is responsible for “the development and endorsement of International Financial Reporting Standards (IFRSs)” (IFRS, 2011).
The qualitative characteristics consist of both fundamental and enhancing features. This paper will focus on the main characteristics which are: relevance, faithful representation, comparability and the ability to understand the information, and will be applying these to the techniques used to reliably measure tangible non-current assets.
In order to reliably measure these assets it is essential to be consistent with the measurement technique chosen. At a recent conference Hans Hoogervorst, the chairman of the IASB, admitted that he was “struck by the multitude of measurement techniques” and realises that measurement is a “thorny issue” which needs tackling (Hoogervorst, 2012).
Indeed, when it comes to techniques there is: historic cost, fair value, realisable value, value in use and many more. In response to this plethora of measurement techniques it is clear to understand why Hans Hoogervorst believes that “accounting standard-setters come under so much pressure” (Hoogervorst, 2012). Considering this stems the first



References: Bricker, R. & Chandar, N. (2012) Relevance, reliability and restricted security fair values: a look at investment trusts, Managerial Finance July 2012, Vol Elliott, B. & Elliott, J. (2012) Financial Accounting and Reporting Page 247-248, Fifteenth Ed Hoogervorst, H. (2012) ‘The imprecise world of accounting’ Proceedings of the International Association for Accounting Education & Research (IAAER) Conference Amsterdam HP (2012) HP Issues statement regarding Autonomy impairment charge Available: http://www.hp.com/hpinfo/newsroom/press/2012/121120b.html [Accessed: 23rd November, 2012] IAS Plus (2012) IAS 16 ‘Property, Plant and Equipment’ Available: http://www.iasplus.com/en/standards/standard14 [Accessed: 12th November, 2012] IFRS (2011) IASB and IFAC to enhance co-operation in developing private and public sector accounting standards Available: http://www.ifrs.org/Alerts/PressRelease/Pages/IASB-IFAC-MOU-Nov-2011.aspx [Accessed: 30th October, 2012] Marks & Spencer (2012) Annual Report and Accounts Available: http://annualreport.marksandspencer.com/_assets/downloads/Marks-and-Spencer-Annual-report-and-financial-statements-2012.pdf [Accessed: 25th November, 2012] Whitbread plc. (2012) Annual Report and Accounts Available: www.whitbread.co.uk/content/dam/whitbread/siteimages/investors/results-reports/annual-report-2011-12.pdf [Accessed: 23rd November, 2012] Zheng, X., Guo, Y, & Xu, J 7th International Scientific Conference, “Business and Management” May 10-11, 2012, page 269-270

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