QUESTION 1 a. Outline the objective and the principles of a theory that prescribes fair value accounting. Fair value accounting is to measure selected assets at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The objective of fair value accounting is linked with the objective of ‘decision usefulness’ of general purpose financial reporting. That is‚ to provide relevant information that
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purpose of accounting for an organisation What is accounting Accounting is a recording‚ reporting‚ and analysis of financial transactions of the business. The person which is in charge or accounting is known as an accountant‚ this person is specifically in charge to follow rules and regulations‚ such as the generally accepted accounting principle. Accounting lets businesses to analyze the financial performance of the business‚ and look for statics such as net profit. The accounting process
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Exposure Draft Accounting Standard (AS) 10 (revised) Tangible Fixed Assets (Last date for Comments: February 28‚ 2006) The Institute of Chartered Accountants of India Issued by Accounting Standards Board Exposure Draft Revised AS 10‚ Tangible Fixed Assets Contents INVITATION TO COMMENT [Exposure Draft] Accounting Standard AS 10 (revised) Pages 4-5 Tangible Fixed Assets OBJECTIVE SCOPE DEFINITIONS RECOGNITION Initial Costs Subsequent Costs MEASUREMENT AT RECOGNITION Elements
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The International Accounting Standard Committee (IASC) came into existence on June 29 1973 when sixteen accounting bodies from nine nations (designated as founder members) signed the agreement and constitution for its formation with headquarters at London. The objective of the committee is "to formulate and publish in the public interest standards to be observed in the presentation of audited financial statements and to promote their worldwide acceptance and observance". This would
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extraordinary items‚ and cumulative effects of changes in accounting principle. This Statement does not change those classifications or other requirements for reporting results of operations. (FAS 130-4-16) 3. Define classifications within other comprehensive income; give examples. Classifications within other comprehensive income Items included in other comprehensive income shall be classified based on their nature. For example‚ under existing accounting standards‚ other comprehensive income shall be
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financial reporting? Provide information on the liquidation value of an enterprise.** Accounting principles are "generally accepted" only when an authoritative accounting rule-making body has established it in an official pronouncement. it has been accepted as appropriate because of its universal application. both a and b.** Generally accepted accounting principles include detailed practices and procedures as well as broad guidelines of general application
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Financial statements are the basic statements that summarize the financial activities of a business and are prepared by businesses to indicate the financial steadiness of the business to investors‚ creditors‚ and other external entities (McGraw-Hill Higher Education‚ 2009). The income statement is a representation of the revenues and expenses for a specific period of time in a business. Its purpose is to detail the revenues‚ expenses‚ and net income or loss. A net income is the result of revenues
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Synopsis. Historical Cost Accounting is a traditional valuation method as it reflects only on the past cost of the asset‚ however in the contemporary business environment companies must remain flexible and transparent. This belief has lead to the creation of several other valuation methods‚ due to word constraints I have focused primarily on Fair Value Accounting as an alternative to Historical Cost Accounting. Although Fair value accounting is a theoretically superior valuation methodology‚ there
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Applicability of Accounting Standard (AS) 26‚ Intangible Assets‚ to intangible items 1. Accounting Standard (AS) 26‚ ‘Intangible Assets’‚ came into effect in respect of expenditure incurred on intangible items during accounting periods commencing on or after 1-4-2003 and is mandatory in nature from that date for the following: (i) Enterprises whose equity or debt securities are listed on a recognised stock exchange in India‚ and enterprises that are in the process of issuing equity or debt
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Vocabulary Quiz Name _______________ Chapter 1 1. An accounting principle that states that assets should be recorded at their cost. 2. Debts and obligations of a business. 3. Resources owned by a business. 4. The amount by which expenses exceed revenues. 5. An association of two or more persons to carry on as co-owners of a business for
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