Concepts for Analysis 1-1Presented below are four stat.docxdonnajames55
Concepts for Analysis 1-1
Presented below are four statements which you are to identify as true or false.
1.
GAAP is the term used to indicate the whole body of FASB authoritative literature.
2.
Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements.
3.
The primary governmental body that has influence over the FASB is the SEC.
4.
The FASB has a government mandate and therefore does not have to follow due process in issuing a standard.
Concepts for Analysis 1-2
Presented below are four statements which you are to identify as true or false.
1.
The objective of financial statements emphasizes a stewardship approach for reporting financial information.
2.
The purpose of the objective of financial reporting is to prepare a balance sheet, an income statement, a statement of cash flows, and a statement of owners’ or stockholders’ equity.
3.
Because they are generally shorter, FASB interpretations are subject to less due process, compared to FASB standards.
4.
The objective of financial reporting uses an entity rather than a proprietary approach in determining what information to report.
To satisfy the stewardship reporting responsibility of management, companies prepare multiple sets of special-purpose financial statements to meet the information needs of a variety of financial statement users.
True
False
Practice Question 4
Accounting principles are "generally accepted" only when
I. an authoritative accounting rule-making body has established it in an official pronouncement.
II. it has been accepted as appropriate because of its universal application.
I only.
II only.
I or II.
Neither I nor II.
Practice Question 25
The Codification’s purpose is to integrate and synthesize existing GAAP?not to create new GAAP.
All of the following are true regarding the FASB Codification except:
the goal of the Codification was to provide one place where all authoritative literature about financial statement preparation could be found.
the purpose of the Codification is to create new GAAP.
the Codification was created to simplify user access.
the Codification changes the way GAAP is documented, presented, and updated.
Correct!
IFRS stands for:
International Federation of Reporting Services.
Independent Financial Reporting Standards.
International Financial Reporting Standards.
Integrated Financial Reporting Services.
The major key players on the international side are the:
IASB and FASB.
SEC and FASB.
IOSCO and the SEC.
IASB and IOSCO.
IFRS is comprised of:
International Financial Reporting Standards and FASB Financial Reporting Standards.
International Financial Reporting Standards, International Accounting Standards, and International Accounting Interpretations.
International Accounting Standards and International Accounting Interpretations.
F.
Concepts for Analysis 1-1Presented below are four stat.docxdonnajames55
Concepts for Analysis 1-1
Presented below are four statements which you are to identify as true or false.
1.
GAAP is the term used to indicate the whole body of FASB authoritative literature.
2.
Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements.
3.
The primary governmental body that has influence over the FASB is the SEC.
4.
The FASB has a government mandate and therefore does not have to follow due process in issuing a standard.
Concepts for Analysis 1-2
Presented below are four statements which you are to identify as true or false.
1.
The objective of financial statements emphasizes a stewardship approach for reporting financial information.
2.
The purpose of the objective of financial reporting is to prepare a balance sheet, an income statement, a statement of cash flows, and a statement of owners’ or stockholders’ equity.
3.
Because they are generally shorter, FASB interpretations are subject to less due process, compared to FASB standards.
4.
The objective of financial reporting uses an entity rather than a proprietary approach in determining what information to report.
To satisfy the stewardship reporting responsibility of management, companies prepare multiple sets of special-purpose financial statements to meet the information needs of a variety of financial statement users.
True
False
Practice Question 4
Accounting principles are "generally accepted" only when
I. an authoritative accounting rule-making body has established it in an official pronouncement.
II. it has been accepted as appropriate because of its universal application.
I only.
II only.
I or II.
Neither I nor II.
Practice Question 25
The Codification’s purpose is to integrate and synthesize existing GAAP?not to create new GAAP.
All of the following are true regarding the FASB Codification except:
the goal of the Codification was to provide one place where all authoritative literature about financial statement preparation could be found.
the purpose of the Codification is to create new GAAP.
the Codification was created to simplify user access.
the Codification changes the way GAAP is documented, presented, and updated.
Correct!
IFRS stands for:
International Federation of Reporting Services.
Independent Financial Reporting Standards.
International Financial Reporting Standards.
Integrated Financial Reporting Services.
The major key players on the international side are the:
IASB and FASB.
SEC and FASB.
IOSCO and the SEC.
IASB and IOSCO.
IFRS is comprised of:
International Financial Reporting Standards and FASB Financial Reporting Standards.
International Financial Reporting Standards, International Accounting Standards, and International Accounting Interpretations.
International Accounting Standards and International Accounting Interpretations.
F.
Accounting Conventions and StandardsStandard-Setting Groups FAS.docxdaniahendric
Accounting Conventions and Standards
Standard-Setting Groups: FASB, SEC, AICPA
There are three main organizations whose work in supporting certified public accountants (CPAs) and upholding standard accounting practices are inextricably linked with the careers of professionals in this field:
· The Financial Accounting Standards Board (FASB) is a private, nonprofit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States in the public’s interest.
· The US Securities and Exchange Commission (SEC) is a federal agency that holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation’s stock and options exchanges, and other electronic securities markets in the United States.
· Founded in 1887, the American Institute of Certified Public Accountants (AICPA) is a professional organization of CPAs in the United States. The AICPA has nearly 386,000 CPA members in 128 countries in business and industry, public practice, government, education, student affiliates and international associates.
The Financial Accounting Standards Board (FASB)
The Financial Accounting Standards Board (FASB) is a private, nonprofit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States in the public’s interest.
Under the direction of the SEC, the Committee on Accounting Procedure was created by the AICPA in 1939. It was the first private-sector organization that had the task of setting accounting standards in the United States. In 1959, the Accounting Principles Board (APB) was formed to meet the demand for more structured accounting standards. The APB issued pronouncements on accounting principles until 1973, when it was replaced by the Financial Accounting Standards Board (FASB). The APB was disbanded in the hopes that the smaller, fully independent FASB could more effectively create accounting standards. The APB and the related SEC were unable to operate completely independently of the US government.
The FASB’s mission is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.
To achieve this mission, FASB has five goals:
1. Improve the usefulness of financial reporting by focusing on the primary characteristics of relevance, reliability, comparability, and consistency.
2. Keep standards current to reflect changes in methods of doing business and in the economy.
3. Consider promptly any significant areas of deficiency in financial reporting that might be improved through standard setting.
4. Promote international convergence of accounting standards concurrent with improving the quality of financial reporting.
5. Improve common understanding of the nature and purposes of information in financial reports.
The FASB sets standards based on their conceptual framewo ...
International Financial Reporting Standards (IFRS)AbhirajSingh67
Accounting for Managers
International Financial Reporting Standards(IFRS) – Meaning or Definitions
Frameworks for IFRS
Importance
Advantages & Disadvantages
Requirements of the IFRS
Financial Standard SettingIntroductionInternational Fina.docxbryanwest16882
Financial Standard Setting
Introduction
International Financial Reporting Standards (IFRS) are guidelines and rules that are designed by the International Accounting Standards Board (IASB) that are used to provide a uniform language and platform for reporting different financial statements. The IFRS has been adopted in many countries in Europe, Asia, South America, and Australia. The most notable absentee is the United States who uses the Generally Accepted Accounting Standards (GAAP). IFRS is meant to create transparency in financial reporting so that it can assist the end-users in informative decision making. https://coolassignment.com/2021/06/01/discuss-the-importance-of-an-organization-determining-its-operational-alignment/ The IFRS improves efficiency and accountability in reporting in the global markets. The IFRS is considered as a principle based standard compared to the U.S. GAAP which is rule-based standard. Since its adoption, Australia has benefited from IFRS in various ways, such as low cost of capital and uniformity in financial reporting. This paper will focus on some of the principles of IFRS, its benefits and how it compares to the U.S. GAAP.
The International Financial Reporting Standards has been able to promote transparency in that it has encouraged firms with subsidiaries to synchronize operations of the company like auditing reporting and training standards. It will be easy to monitor the processes of the firm and its subsidiaries if there are set standards that are universal to the whole company. The format used in the business entity should be similar in all the offices so that there is consistency in accounting and reporting the company records (Devereux, 2011).
The International Financial Reporting Standards pursues to level the playing field in preparation and presentation of financial statement of a person or a business entity. It is easy to compare the performance of both the domestic and foreign business entities. The use of a common accounting dialect by the multinational corporations and the subsidiaries to use IFRS in consolidation of the financial statements helps everyone in the system to understand. The use of a similar accounting and reporting standard helps to eradicate the differences brought about by the use of different accounting modes in financial statements (Kieso, Weygandt & Warfield, 2012). https://bestofassignment.com/criminology/write-a-personal-philosophy-of-leadership-through-your-construction-of-a-persona/
The use of a similar accounting standard will eliminate unnecessary cost and time in the preparation of reporting the financial statements. The use of different regulations and the standards in a firm may prove to be costly than use of the same standards. To embed IFRS uniform accounting standards in the firm and the subsidiaries reduces the cost of preparation of financial statement. This system will provide accurate and on time statements that are critical in the decision making of th.
IAS / IFRS Basic understanding
Learning outcomes
(1) What is IAS?
(2) What are International Financial Reporting Standards (IFRS)?
(3) Understanding International Financial Reporting Standards (IFRS)
(4) From IAS to IFRS
(5) GAAP vs IFRS vs IAS
(6) Standard IFRS Requirements
(7) IFRS vs. American Standards
(8) Composition of IFRS
(9) History of IFRS
(10) Combination of Accounting Standards
(11) List of International Financial Reporting Standards (IFRS)
(12) List of International Accounting Standards (IAS)
(13) List of IFRIC Interpretations
(14) List of SIC Interpretations
(15) List of Other pronouncements
(16) Adaption of IAS/IFRS in Bangladesh
(17) Adaption of IAS/IFRS in Bangladesh in Future -FRC
(18) Overview of IAS-1: Presentation of Financial Statements
(19) Overview of IAS-2: Inventories
(20) Overview of IAS-7: Statement of Cashflow
(21) Overview of IAS-8: Accounting Policies, Changes in Accounting Estimates and Errors
(22) Overview of IAS-10: Events After the Reporting Period
(23) Overview of IAS-12: Income Taxes
(24) Overview of IAS-16: Property, Plant and Equipment
Utilizing HFM to Handle the Requirements of IFRSAlithya
Ranzal Practice Director and Oracle ACE, Peter Fugere guides attendees through best practices on building HFM applications to consider the impact of IFRS. HFM has been used for years to do multi-GAAP reporting, so IFRS is not completely uncharted waters. Many companies in Europe and Canada have already moved, and their experience provides guidance for companies in North America. HFM has specific functionality that makes the IFRS transition easier and for North America, moving now may minimize costs later associated with statutory reporting and historical data collection.
Quantitative Study of Comparison between Indian GAAP and IFRS - Corporate Fin...Aakriti Agarwal
Based on the thesis "Cash Flow Ratios to Predict Soundness of Business Investment" we've tried to see how the performance of a company might seem different financially just because of difference in accounting standards. This is also an attempt to unmask the true picture of a company's financial health from its operations alone.
Accounting Conventions and StandardsStandard-Setting Groups FAS.docxdaniahendric
Accounting Conventions and Standards
Standard-Setting Groups: FASB, SEC, AICPA
There are three main organizations whose work in supporting certified public accountants (CPAs) and upholding standard accounting practices are inextricably linked with the careers of professionals in this field:
· The Financial Accounting Standards Board (FASB) is a private, nonprofit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States in the public’s interest.
· The US Securities and Exchange Commission (SEC) is a federal agency that holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation’s stock and options exchanges, and other electronic securities markets in the United States.
· Founded in 1887, the American Institute of Certified Public Accountants (AICPA) is a professional organization of CPAs in the United States. The AICPA has nearly 386,000 CPA members in 128 countries in business and industry, public practice, government, education, student affiliates and international associates.
The Financial Accounting Standards Board (FASB)
The Financial Accounting Standards Board (FASB) is a private, nonprofit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States in the public’s interest.
Under the direction of the SEC, the Committee on Accounting Procedure was created by the AICPA in 1939. It was the first private-sector organization that had the task of setting accounting standards in the United States. In 1959, the Accounting Principles Board (APB) was formed to meet the demand for more structured accounting standards. The APB issued pronouncements on accounting principles until 1973, when it was replaced by the Financial Accounting Standards Board (FASB). The APB was disbanded in the hopes that the smaller, fully independent FASB could more effectively create accounting standards. The APB and the related SEC were unable to operate completely independently of the US government.
The FASB’s mission is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.
To achieve this mission, FASB has five goals:
1. Improve the usefulness of financial reporting by focusing on the primary characteristics of relevance, reliability, comparability, and consistency.
2. Keep standards current to reflect changes in methods of doing business and in the economy.
3. Consider promptly any significant areas of deficiency in financial reporting that might be improved through standard setting.
4. Promote international convergence of accounting standards concurrent with improving the quality of financial reporting.
5. Improve common understanding of the nature and purposes of information in financial reports.
The FASB sets standards based on their conceptual framewo ...
International Financial Reporting Standards (IFRS)AbhirajSingh67
Accounting for Managers
International Financial Reporting Standards(IFRS) – Meaning or Definitions
Frameworks for IFRS
Importance
Advantages & Disadvantages
Requirements of the IFRS
Financial Standard SettingIntroductionInternational Fina.docxbryanwest16882
Financial Standard Setting
Introduction
International Financial Reporting Standards (IFRS) are guidelines and rules that are designed by the International Accounting Standards Board (IASB) that are used to provide a uniform language and platform for reporting different financial statements. The IFRS has been adopted in many countries in Europe, Asia, South America, and Australia. The most notable absentee is the United States who uses the Generally Accepted Accounting Standards (GAAP). IFRS is meant to create transparency in financial reporting so that it can assist the end-users in informative decision making. https://coolassignment.com/2021/06/01/discuss-the-importance-of-an-organization-determining-its-operational-alignment/ The IFRS improves efficiency and accountability in reporting in the global markets. The IFRS is considered as a principle based standard compared to the U.S. GAAP which is rule-based standard. Since its adoption, Australia has benefited from IFRS in various ways, such as low cost of capital and uniformity in financial reporting. This paper will focus on some of the principles of IFRS, its benefits and how it compares to the U.S. GAAP.
The International Financial Reporting Standards has been able to promote transparency in that it has encouraged firms with subsidiaries to synchronize operations of the company like auditing reporting and training standards. It will be easy to monitor the processes of the firm and its subsidiaries if there are set standards that are universal to the whole company. The format used in the business entity should be similar in all the offices so that there is consistency in accounting and reporting the company records (Devereux, 2011).
The International Financial Reporting Standards pursues to level the playing field in preparation and presentation of financial statement of a person or a business entity. It is easy to compare the performance of both the domestic and foreign business entities. The use of a common accounting dialect by the multinational corporations and the subsidiaries to use IFRS in consolidation of the financial statements helps everyone in the system to understand. The use of a similar accounting and reporting standard helps to eradicate the differences brought about by the use of different accounting modes in financial statements (Kieso, Weygandt & Warfield, 2012). https://bestofassignment.com/criminology/write-a-personal-philosophy-of-leadership-through-your-construction-of-a-persona/
The use of a similar accounting standard will eliminate unnecessary cost and time in the preparation of reporting the financial statements. The use of different regulations and the standards in a firm may prove to be costly than use of the same standards. To embed IFRS uniform accounting standards in the firm and the subsidiaries reduces the cost of preparation of financial statement. This system will provide accurate and on time statements that are critical in the decision making of th.
IAS / IFRS Basic understanding
Learning outcomes
(1) What is IAS?
(2) What are International Financial Reporting Standards (IFRS)?
(3) Understanding International Financial Reporting Standards (IFRS)
(4) From IAS to IFRS
(5) GAAP vs IFRS vs IAS
(6) Standard IFRS Requirements
(7) IFRS vs. American Standards
(8) Composition of IFRS
(9) History of IFRS
(10) Combination of Accounting Standards
(11) List of International Financial Reporting Standards (IFRS)
(12) List of International Accounting Standards (IAS)
(13) List of IFRIC Interpretations
(14) List of SIC Interpretations
(15) List of Other pronouncements
(16) Adaption of IAS/IFRS in Bangladesh
(17) Adaption of IAS/IFRS in Bangladesh in Future -FRC
(18) Overview of IAS-1: Presentation of Financial Statements
(19) Overview of IAS-2: Inventories
(20) Overview of IAS-7: Statement of Cashflow
(21) Overview of IAS-8: Accounting Policies, Changes in Accounting Estimates and Errors
(22) Overview of IAS-10: Events After the Reporting Period
(23) Overview of IAS-12: Income Taxes
(24) Overview of IAS-16: Property, Plant and Equipment
Utilizing HFM to Handle the Requirements of IFRSAlithya
Ranzal Practice Director and Oracle ACE, Peter Fugere guides attendees through best practices on building HFM applications to consider the impact of IFRS. HFM has been used for years to do multi-GAAP reporting, so IFRS is not completely uncharted waters. Many companies in Europe and Canada have already moved, and their experience provides guidance for companies in North America. HFM has specific functionality that makes the IFRS transition easier and for North America, moving now may minimize costs later associated with statutory reporting and historical data collection.
Quantitative Study of Comparison between Indian GAAP and IFRS - Corporate Fin...Aakriti Agarwal
Based on the thesis "Cash Flow Ratios to Predict Soundness of Business Investment" we've tried to see how the performance of a company might seem different financially just because of difference in accounting standards. This is also an attempt to unmask the true picture of a company's financial health from its operations alone.
Introduction to AI for Nonprofits with Tapp NetworkTechSoup
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1. A Comparison Of Ifrs And Gaap
A Comparison of IFRS and GAAP
Numerous oversight organizations implement and monitor the generally accepted accounting principles, also
referred to as GAAP, of their individual countries. GAAP are in place to maintain a level of consistency between the
reports of individual firms, Issues arise, however when a company operates in several countries. To address these
problems, the International Accounting Standards Board (IASB) developed the International Financial Reporting
Standards, or IFRS.
The IFRS are superseding GAAP as the official reporting structure of many countries and as of July 2014, 283 have
adopted the IASB's new rule book (PricewaterhouseCoopers, 2014). The transition to IFRS has spawned a
worldwide dialog of investors and analysts discussing the effects it will have on reporting and the implications this
move carries into the future. This paper will review some financial reporting standards, the major distinctions
between the U.S. GAAP and IFRS, and the competitive advantages and disadvantages of altering the U.S. reporting
structure.
Objective of Financial Reporting
IFRS and GAAP both insist on information being faithfully represented and relevant. Faithfully represented data
consistently adheres to proper trade standards and is conservatively reported. Any financial information that is
deemed important to the users of an organization's financial statement is considered relevant and should always be
included. There are many similarities between the two
... Get more on HelpWriting.net ...
2.
3. Comparing the Gaap and Ifrs
Introduction There have been proposals that have been working on with regard to the replacement of GAAP
(Generally Accepted Accounting Principles) with IFRS (International Financial Reporting Standards) as used in the
accounting and financial reporting aspects. Such convergence requires that the functions of the GAAP standards be
added to the IFRS. The International Accounting Standards Board (IASB) developed the IFRS which is a less–
detailed financial reporting system.
This paper seeks to analyze the GAAP and the IFRS, their mandate and functions. Further, it shall compare the
differences and similarities of the two standards which have such great implications to the functions of accountants,
attorneys, corporate directors and ... Show more content on Helpwriting.net ...
However, it must not be ruled out that the basic financial statements are similar to those of the IFRS standard
(Epstein & Jermakowicz, 2010). The FASB conceptual framework bears a marked similarity to the IASB framework
which works to effect efficient preparation and presentation of financial statements. It is under this framework that
convergence with the IFRS is promised. However, there exists a comprehensive guide in view of financial
statements in terms of preparation and presentation in the IFRS standards. There is also a minimum point identified
for the identification of all items in the financial statements. In the IFRS, both the FASB and IASB frameworks are
essential in the preparation and presentation of financial statements. However in these IFRS standards, the IASB is
less detailed. Convergence with the GAAP is also promised.
In the GAAP standards, comparative financials are preferred although it is not a requirement. These are of
paramount importance especially for SEC filings. In this basic principle, specificity is required with regard to the
location of disclosure either in statements or notes. The FASB is the official source and up in the hierarchy above
GAAP for the purposes of accounting standards codification
... Get more on HelpWriting.net ...
4.
5. The Impact Of Ifrs On American Business
In 2014, a study from PricewaterhouseCoopers pointed that American investors are looking over–seas' capital
market for investment opportunities, and foreign investors are also looking for investing opportunities in America.
According to the research from PricewaterhouseCoopers in 2014, an estimates shows that there are around seven
trillion US dollars are invested in foreign stock markets, and American markets are open to non–US firms too. Many
of the foreign companies use IFRS rule without any reconciliation to GAAP.
In the major international market, there are currently only four countries do not require IFRS rules, and they are
China, Japan, India, and the US. Pacter (2015) explained that presently there are one hundred and forty ... Show
more content on Helpwriting.net ...
Instead, in the over–seas markets, numerous countries require IFRS for the statutory financial reporting. As the
result, the multinational companies located in the US will need to have the IFRS reports for their subsidiaries located
in over–seas countries.
Pologeorgis (2012) stated that the diversity of accounting principle has an essential impact on the stock markets,
corporate management, and financial reporting. He pointed that when people seeking for international capitals,
varies of dissimilar accounting principles create discrepancies in their financial reporting. If people cannot
understand the differences between IFRS and GAAP, they may have the chance to make the wrong decisions and
loss money in the capital markets. Pologeorgis (2012) also mentioned that international investors have to relearn the
new principal in order to be more familiar with the international standards. Based on above, there is a keen
motivation for people to understand the differences and similarities of GAAP and IFRS. This research will show
business people the main similarities and differences of GAAP and IFRS.
In revenue recognition:
In 2014, Sedki, Sedki, Strickland concluded that GAAP is complicated for people to use. It provides more than two
hundred industry specific rules for different firms to recognize revenue. Therefor there is no effective regulation for
people to use when they need to
... Get more on HelpWriting.net ...
6.
7. Gaap Essay
The country selected for this study is the United Kingdom (UK). UK Generally Accepted Accounting Practice
(GAAP) has been in place for a long period of time and was harmonized in 2005 so as to comply with the
international accounting standards. The UK embraced the principles of the International Financial Reporting
Standards (IFRS) in 2005 after the European Union (EU) mandated that all members that were publicly listed
companies be subject to reporting under the International Accounting Standards (IAS). This was to help facilitate
that those listed companies could easily be compared to onr other on their performance and transparency was
improved since they were now subject to the same principles of reporting. Companies in the United ... Show more
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Chartered accountants are therefore expected to display professionalism in their work so that they are able to
maintain public confidence in the companies. This is a result of the accountants reporting the true performance of the
companies they represent (Radebaugh & et al, 2012).
The conduct of chartered accountants in the UK is governed by the Code of Ethics. The latest revision of these ethics
took place January 1, 2011. The fundamental rules that govern the work of these accountants are as follows and
similar to those in the US:
Integrity – Accountants should always ensure that they are honest and straightforward in their activities with every
instance that they have clients. They should always maintain the lines of duty and maintain business relationships
during all official duties (Nobes, 2015).
Confidentiality – This calls upon any professional accountant to ensure that they do not disclose the accounting
information of one company to any unauthorized parties. Such information should only be disclosed if the
professional or legal right is granted by the relevant authority. Information obtained from a company should
therefore not be used for any personal benefit by a professional accountant (Nobes, 2015).
Professional behavior – This indicates that professional accountants comply with the stated UK laws and regulations
that govern the
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8.
9. Ifrs And Gaap : Gaap Vs. Ifrs
Amazon.com, Inc. : GAAP vs. IFRS
The Generally Accepted Accounting Principles (GAAP) are set by the Financial Accounting Standards Board
(FASB), an independent, not–for–profit organization, established in 1973 and most U.S companies use GAAP. The
FASB's standards are recognized as authoritative by the Securities and Exchange Commission (SEC), by the
American Institute of Certified Public Accountants (AICPA), and by the State Boards of Accountancy.
International Financial Reporting Standards (IFRS) are the most used set of accounting principles across the world.
IFRS are issued by the International Accounting Standards Board (IASB), an independent, private–sector. Over
12,000 companies in more than 116 countries have adopted IFRS, and more countries are continuing to adopt the
standards each year. (IFRS, 2015).
IFRS and GAAP are two separate sets of accounting used in different countries. ISAB created IFRS and they are
hoping to create a set of universal accepted accounting principles for a better comparability between companies of
different countries. IFRS is principal base while US GAAP is rules based. There are advantages and disadvantages to
transition to IFRS from GAAP, and by comparing US GAAP and IFRS we noticed a lot of the same standards and
concepts, but also some major differences. GAAP recommends a balance sheet but is not required, while in a IFRS
balance sheet is required. Also, a statement of comprehensive income is required under GAAP, but not under
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10.
11. Gaap Regulatory Framework
Historically, the major factors separating both standards were that IFRS is principles–based and US GAAP is rules–
based. In a rules–based standard, there will be less ambiguity and the actions required are more defined whereas in a
principle–based standard, there is a possibility of different interpretations being made for a similar type of
transaction. (Forgas, 2008). Further, in a volatile economic environment, adopting a rules–based standard would be
less risky for accountants and reduce potential litigation costs for the company in the event there is non–compliance
or legal actions involved. (The Institute of Chartered Accountants of Scotland, ICAS, 2006) A rules–based standard
prevents interpretation errors on the part of users from different ... Show more content on Helpwriting.net ...
In a previous study on the usefulness of convergence, a comparison of firms implementing IFRS in 27 countries
matched against sample of similar size and industry firms in the US found, the use of converged IFRS standard by
US firms instead of US GAAP led to a more established accounting system with value relevance comparability
(E.Barth, R.Landsman, Lang, & Williams, 2012, p. 6). In contrast, Jamal et al (2010) state "The need for a global
accounting regulator is overstated. A global regulator is unlikely to help achieve the stated goals of comparability
and consistency of financial reporting on a global basis" Based on the joint standard of IFRS15/ASU606 issued,
there appears to be a compromise on both IASB and FASB's part to include and exclude certain aspects therefore,
although the gap is reduced, full convergence is far from being achieved. The decision makers at IASB therefore,
due to inability to achieve the true goal of convergence, is resorted to undertake a vague position and compromise
with the 'allocation model' (now known as 'performance obligation' model in the final joint standard issued) (Biondi,
et al., 2014, p. 29). Nevertheless, in terms of usefulness to stakeholders, the joint standard addresses the problem
arising from the original IAS18&IAS11/ASC605
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12.
13. Essay about Generally Accepted Accounting Principles
There are general rules and concepts that preside over the field of accounting. These general rules, known as basic
accounting principles and guidelines, shape the groundwork on which more thorough, complex, and legalistic
accounting rules are based. The Financial Accounting Standards Board (FASB) uses the basic accounting principles
and guidelines as a foundation for their own comprehensive and complete set of accounting rules and standards.
GAAP is exceptionally useful because it attempts to regulate and normalize accounting definitions, assumptions, and
methods. Because of generally accepted accounting principles one is able to presuppose that there is uniformity from
year to year in the methods that are used to prepare a ... Show more content on Helpwriting.net ...
One explanation of why firms might choose to put into practice conservative accounting practices lies in efficient
contracting theory, for example, conservative accounting can be used as part of a firms strategy to ease the conflicts
that arise among the many claimants of a firm's net assets. This is because conservative accounting methods place
restrictions on the distribution of those net assets thereby limiting the scope for self–serving opportunistic behavior.
Conservative accounting can also help in bringing into line the interests of managers and shareholders through its
impact on accounting earnings measures that are regularly used in management compensation contracts (Iyengar &
Zampelli, 2010). The literature on conservatism accounting is very limited. Watts (2003), has suggested that
conservatism is related to debt contracts, while Gjesdal & Antle (2001) suggest that conservatism is the interaction
between income measurement and dividend covenants. Even though conservatism may be most favorable, the result
derives from shareholders trading off cash flows in different periods, not from the need to protect the interests of
creditors. Another theory used in accounting is that of Materiality. This notion necessitates that accounting centers
on material facts and not on facts that are immaterial to figuring revenues. Only transactions that have monetary
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14.
15. GAAP in the U.S. and the UK
31. Summary of differences between UK and US generally accepted accounting principles The Group's consolidated
accounts are prepared in accordance with generally accepted accounting principles in the United Kingdom ("UK
GAAP"), which differ in certain respects from generally accepted accounting principles in the United States ("US
GAAP"). Differences which have a significant effect on the consolidated net profit and shareholders' funds of the
Group are set out below. While this is not a comprehensive summary of all differences between UK and US GAAP,
other differences would not have a significant effect on the consolidated net profit or shareholders' funds of the
Group. The differences have been shown as gross of tax with the related ... Show more content on Helpwriting.net ...
Signet Group plc Annual Report & Accounts year ended 29 January 2005 103 Notes to the accounts (continued)
Extended service agreements Prior to the adoption of the amendment to FRS 5 'Application Note G – Revenue
Recognition', the Group recognised for UK GAAP purposes all revenue arising from the sale of extended service
agreements in the US at the date of sale with provision being made for the estimated cost of future claims arising
under these warranties. Following the adoption of the above, under UK GAAP revenue from the sale of extended
service agreements in the US is now deferred and recognised, net of incremental costs arising from the initial sale, in
proportion to anticipated claims arising. This period is based on the historical claims experience of the US business,
which has been consistent since these products were launched. The Group reviews the pattern of claims at the end of
each year to determine any significant trends that may require changes to revenue recognition rates. Under US
GAAP, the Group historically recognised revenue immediately on a proportion of contracts where analysis of past
experience showed that no claim or cost arose, and deferred the balance of revenue over the estimated period of
future claims. The Group's US GAAP policy has now been corrected so that the policies applied under UK and US
GAAP are now consistent, with no future GAAP differences expected to arise.
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16.
17. Cpa Report
CPA Report ACC/545 University of Phoenix Internal Memo To: Management From: CPA Re: Further Information
regarding Request Before any information can be given to outside CPA's, the professional responsibilities of a CPA
must be outlined and understood as well as what the differences between a review and an audit are. With the
examination of a subsidiary that has been established as a corporation there are certain questions that arise such as:
What is the methodology used in determining deferred taxes, What it t he procedures for reporting accounting
changes and error corrections, and What is the rationale behind establishing the subsidiary as a corporation. The
draft below outlines my response to the questions that have been ... Show more content on Helpwriting.net ...
Items that require estimates are uncollectible receivables, inventory obsolescence, useful lives and salvage values of
assets and changes in depreciation methods to name a few. Such accounting estimates will alter as there are new
events that occur, as they acquire more experience, or as it obtains further information on the events. Lastly,
reporting a change in entity involves reporting the change by altering the financial statements of all prior periods
presented. This allows the revised financials to reflect financial information for the newly developed entity for all
periods. An example of a change in entity is presenting consolidated statements in place of statements of individual
companies or changing the companies included in combined financial statements. Error Corrections There are
certain errors that are not as imperative to investors as other errors are. An error that can be classified as significant
for example those errors that result in overstatement should always be pointed out to investors. There are certain
errors that can reveal weaknesses in a company's internal controls therefore, resulting in more significant errors.
Errors should be corrected as soon as they are discovered. To correct errors the restatement approach should be
employed and all prior period statements that are presented should be corrected and the beginning balance of
retained earnings for the first period presented should be restated when the error effects occur
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18.
19. The International Financial Reporting Standards
There have been plenty of debates surrounding the two type standards; on one side we have the United States
General Accepted Accounting Principle (GAAP) which has always been used until now with International Financial
Reporting Standards (IFRS). A committee of accountants from the American Institute of Accountants (AIA) created
the first set of US GAAP standards in the 1930s. US GAAP is a set of guidelines made to help publicly traded
companies create their financial statements. The International Financial Reporting Standards (IFRS) serves a similar
purpose, but has been globally accepted. European companies first adopted IFRS in 2005, and by 2012 countries
such as Japan, Canada, and India had done the same. Since early 2010, FASB and IASB have been working together
to converge both of these accounting standards. The SEC has been on board, and although they have not been
successful yet, a Work Plan has been developed which lays out factors, which need to be considered before
transitioning into a new reporting system. The main topic for this paper is pension and how both differ from GAAP
and IFRS. In the research, it will mainly geared towards pension plan and the benefits that differ between the U.S
GAAP and IFRS. Through the research the main information comes from the income statement of the company to
identify the difference.
Motivation
The increasing numbers of multinationals, poor macroeconomic conditions and other factors have led many US
companies to consider a
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20.
21. Contingent Liability
Contingent Liability
1. Analyze why a company would prefer not to disclose its contingent liabilities.
In order to understand why a company would or would not disclose his contingent liabilities it is important to know
exactly what a contingent liability is. As I have learned throughout all of my accounting studies a liability is simply
an obligation or debt that a business owes to an individual or an organization. Now there are many liabilities that
include services, payroll, notes, and accounts payable. When one of these liabilities becomes a contingent liability it
means that it is something that is a potential situation at the time. Contingent liabilities depend on a future event.
What this means is the company may or may ... Show more content on Helpwriting.net ...
&
3. Determine what parties and how they could be harmed by non–disclosure.
The GAAP (Generally Accepted Accounting Principles) requires companies to report contingent liabilities,
arrangements, and any additional obligations that may affect a company 's financial condition. These disclosures
should be for the most recent this year and in some cases included any changes or additions from the previous year.
The GAAP has required companies to report these contingent liabilities to assist any financial markets that many
extend credit to a business. This disclosure is also important for stock and shareholders who are looking at
purchasing into a company and even a potential partnership that may develop within a company. If a new partnership
is formed or a new bank obligation is fulfilled in these liabilities were not disclosed it could potentially lead to
additional lawsuits. A bank lending money to a business has to right to know if this business has the possibility of
losing a large amount of funds in the future. Let's say the bank lends the company money and the company has a
possible contingent liability pending. The company does not disclose this to the bank, and the lawsuit results in a
huge loss. The company now does not have the funds to pay for the new loan from the bank. Now we have a
company has to pay in the contingent liability and the bank that potentially will be taking loss. This also applies to a
potential partner that wants to join
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22.
23. Accounting : A Career As A Career And Career
What is a career? A literal dictionary of the word defines as an occupation undertaken for a significant period of a
person's life and with opportunities for progress. Before college, I always confused myself between the words
"career" and "job". Nowadays, there are still many individuals out in the field yet still can't clearly distinguish those
two similar words. After completing my first year of college, I have gained a better understanding between the words
"career" and "job". I believe a job is simply where a person earns the money from while a career is a person's
lifelong passion that move you into higher paying in the future. Currently, I am working toward my associate degree
in business management, but more specifically, accounting. My love for accounting started in my sophomore year of
high school. At first, I wasn't sure if I would like to be an accountant in the future because I chose this only for one
reason: accounting is something that has to do with money. But as I learned deeper into it, I realized accounting is
not just about money, but involved with attention to detail, greater communication skills, and excellent organization.
One year of accounting in high school has rooted my love for accounting, which later lead me to choose business
management as my major in college. If some basic knowledge and skill I acquired from high developed my passion
in accounting, then the financial and managerial accounting classes I took in college definitely broaden my
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24.
25. Study Case
Golden Bear Golf, Inc
Golden Bear Golf, Inc.
The assertions that were relevant to Paragon's construction projects are: existence and occurrence, completeness,
valuation or allocation, and presentation and disclosure.
Existence and occurrence: should have been used to test the revenue and gross profit on its construction projects. By
testing to see if the assertion is appropriate to make sure that all revenue and gross profit exist would have brought
the attention to the $4 million of un–invoiced construction costs that materialized at the end of fiscal 1997. This
assertion test also would have revealed that the earned value method in practice was allowing Paragon to book much
larger amounts of revenue and gross profit on its ... Show more content on Helpwriting.net ...
The audit engagement team's responsibilities to determine if an engagement is a high–risk or normal–risk
engagement are the same. They both use the audit risk model to determine the inherent and control risk to detect if
the account contains errors that could be material when combined with errors in other accounts and detection risk
that the auditor will not detect material errors. By using the audit risk model, it would help in determining the
substantive audit procedures needed for testing. The factors that prompted Sullivan to designate 1997 audit a high–
risk engagement are the subjective nature of the earned value method; Paragon's large unbilled revenues; the
aggressive revenue recognition practices advocated by Golden Bear management; severe weaknesses in Paragon's
cost accounting system. These factors should have alerted Sullivan and his subordinates to be particularly cautious.
No it is not required for auditors to refer to the Audit and Accounting Guides provided by the AICPA for specialized
industries. Although it is not a requirement, it is a great reference on how to perform and handle an audit related to
the particular industry that is being audit if it is provided. If you use the guide that is available it will help on giving
you an idea about the possible procedures and testing that may be required to perform a successful audit. It is also
helpful in case a question arises that may have been of the
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26.
27. U.s. Gaap And International Gaap Essay
Introduction – Inventory U.S. GAAP and International GAAP both define inventories as assets that are held for sale
in the regular course of business, used in the cycle of production for sale, or materials to be utilized in the production
of inventory or the rendering of services. This is the basic definition used to make it applicable to all industries. But
let's take a look closely at what is inventory in certain industries. Inventory in the agricultural industry is the growing
crops, developing animals held for sale, harvested crops, livestock held for sale, and secondary products like calves
from dairy herds and wool from sheep. In the airline industry, the inventory is used for own consumption which sets
it apart from the original definition of inventory. Their inventory curtails mainly of spare parts and materials and
supplies to be used in the operation of the airline. For contractors that are into construction, inventory is the small
tools that are used in the construction activities. For software, the inventory is the tools and technological products
associated with the production of computer software. These are a few scenarios of what is inventory in some
industries. Let's see now some issues associated with inventory, the historical aspects pertaining to U.S. GAAP and
IFRS, revenue recognition and measurement rules, presentation and disclosures, and any upcoming developments
that affect inventory.
Inventory – Recognition and Measurement Rules
Revenue
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28.
29. Ifrs And Gaap Vs. Gaap
Introduction
This covers most of the basics about IFRS and GAAP, and many of the questions which are asked by curious people
interested in accounting, also the users within the accounting world. Included is; some steps taken by both the FASB
and ISAB to move to fair value measurements for financial instruments and the way that it is differed, what
component depreciation is and when must it be used, what revaluation for plant assets and when it should be applied,
some product development expenditures are recorded as development costs so explain the difference between those
accounts and how a company decides which classification is appropriate, how IFRS defines a contingent liability
and provide an example, and describe some similarities and differences between GAAP and IFRS with respect to the
accounting for liabilities.
Steps Taken by FASB and ISAB to move to Fair Value Measurement
8–1: Fair value measurement provide users with financial statements that have an accurate picture of the values of a
company's assets. IFRS and GAAP both require that firms include this information regarding the fair value
measurement practices in the notes to financial statements. FASB and IASB are two different accounting standards
which emphasize different types of accounts and makes financial statements be prepared in a completely different
way. This causes differences which in some accounts assets and liabilities are places and it can cause structural
differences in the financial
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30.
31. Career Salary : Career Skills
TABLE OF CONTENTS
Executive Summary....................................................................................................
Introduction..................................................................................................................
Career Salary Comparison Accounting
Salary.......................................................................................................................................... Financial Analyst
Salary...............................................................................................................................
Career Skills Comparison Accounting
Skills......................................................................................................................................... Financial Analyst
Skills................................................................................................................................
Career Growth Comparison Accounting Jobs
Forecast............................................................................................................................. Financial Analyst Job
Forecast.....................................................................................................................
Work – Life Balance Accounting
Career.......................................................................................................................................... Financial ... Show
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I chose Finance as my major in college mainly because it is wider aspect than Accounting. An Accountant prepares
the company financial paper while a financial Analyst analyze the statement prepare by the Accountant.
In the future, I wish to further my studies by gaining my master in Finance. In addition, it is my utmost desire to
work in the Banking Sector either as an Accountant or a Financial Analyst. The purpose of this paper is to analyze
the Accounting and Financial Career. Which one pays better? The skills of Each Career, The growth of each career
and the work – life balance of an Accounting and Financial Career.
The Bureau of Labor Statistics Occupational outlook handbook reveals that a Financial Analyst is paid better than an
Accountant. Also according to Rasmussen college website a career in Finance requires more skills than an
Accounting. However, according to O*Net there will be more jobs available in the future for an Accountant than a
Financial Analyst. The most important element that matters to me in making a decision is the work–Life balance and
a career in Accounting would allow me to have sufficient time to spend with my family.
Accountant
In order to land a job as an accountant an applicant need at least a Bachelor degree. However, according to the
Occupation Outlook hand book some employers only hire person that a Master's degree in Accounting (2014). An
Accountant
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32.
33. Excello
Excello Telecommunications
October 4, 2014
ETH/376
Katherine Parks
Excello Telecommunications has been profitable for many years, but recently has been faced with increased
competition for its products by overseas manufacturers. For the first time in the company, it appears that earnings
estimates will not be met. Management is concerned about the effect on bonuses, stock options, and the share price
of Excello stock. When Terry Reed, the CFO, learns of a transaction on December 20, 2010, that might solve the
problem. On December 20, 2010, Excello sold $1.2 million of equipment to Data Equipment Systems. Typically, this
type of transaction would be recorded as a sale on the date of shipment. However, the customer requested that ...
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Section 302 requires the certification of periodic reports filed with the SEC by the CEO and CFO of public
companies (Mintz & Morris, 2011). In the end, reporting the sale in 2010 would place Excello under fire by the
SEC for repeated violations of the SOX act. The theoretical gain would ultimately cause distress for Reed as well as
Excello's accounting team.
In conjunction with the SOX act, the accounting team needs to adhere to GAAP regulations. One of the most
important regulations Excello should be concerned with is revenue recognition principle. The GAAP standard for
revenue recognition principle determines the specific conditions under which income becomes realized as revenue
("Investopedia", 2012). Recording the sale to Data Equipment prior to shipment puts Excello in violation of GAAP
guidelines. Although, GAAP consists of common standards and procedures a company uses to impose consistency in
financial reporting for an investors benefit, the guidelines can also help prove financial inconsistencies that, if
needed, can be used against a company accused of any violations regarding SEC regulations. A violation of GAAP
standards will be committed if Excello records the sale in 2010 knowing it was falsely inflate that years overall
income. The legal implications the transaction will incur, is the ethical principles that cannot be ignored. As a
publically traded company, Excello has an obligation to their
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34.
35. Theu.s. Gaap And Ifrs
According to current literature, the global movement to adopt International Financial Reporting Standards (IFRS) is
the paramount financial reporting issue of the 21st century. More Than 100 countries in the world use IFRS as the
basis of financial reporting.
The U.S adopted the idea of IFRS in 2002. Based on a proposed timetable developed by the U.S. Securities and
Exchange Commission, acceptance of IFRS is critically important to management accountants, auditors, financial
analysts, corporate executives, and others involved with financial Reporting. In this paper, I am going to talk first
about the differences between U.S. GAAP and IFRS; then I am going to talk about the similarities between U.S.
GAAP and IFRS; and finally I am ... Show more content on Helpwriting.net ...
On the other hand, the International Financial Reporting Standards (IFRS) also require that the comparative
information should be disclosed with respect to the previous period for all amounts reported in the current period's
financial statements. (.imanet.p,)
2. Layout of the balance sheet and income statement: This financial statement summarizes a company 's assets,
liabilities, and shareholders ' equitant in it period. These balance sheets give investors an idea as to what the
company owns and owes. The US GAAP didn't have a general requirement to prepare the balance sheet and income
statement in accordance with a specific layout, on another hand, companies most present the detail in requirements
in Regulation S–X (Regulation S–X is a prescribed regulation that lays out the specific format and content of
financial reports[1]). It is cited as 17 C.F.R. Part 210; the name of the part is "Form and Content of and
Requirements for Financial Statements, Securities Act of 1933, Securities Exchange Act of 1934, Public Utility
Holding Company Act of 1935, Investment Company Act of 1940, Investment Advisers Act of 1940, and Energy
Policy and Conservation Act of 1975". – ,) but International Financial Reporting Standards (IFRS) does not
prescribe a standard layout, but should include a list of minimum line items. Those minimum line items are less
prescriptive than the requirements in Regulation SX. (ey.com/US/en/Issues/IFRS)
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36.
37. Ifrs And Gaap : Ifrs Vs Gaap
Comparison of IFRS and GAAP
Several large parent organizations implement and apply the generally accepted accounting principles, also known as
GAAP, within their respective countries. GAAP regulations are in place to preserve a level of uniformity between
the reports of each of their individual firms; however, this can be an issue when the parent company has subsidiaries
in foreign countries. In order to alleviate these issues, the International Accounting Standards Board (IASB) created
the International Financial Reporting Standards, also known as IFRS.
IFRS regulations are overriding GAAP regulations as the sanctioned reporting procedure of many countries and 283
countries have formally adopted the IASB manual to use for financial ... Show more content on Helpwriting.net ...
Numerous similarities exist between IFRS and GAAP, including periodicity assumption, accrual–basis accounting
and no cash–basis accounting (Kimmel, Weygandt, and Kieso, 2012). However, a significant difference between
IFRS and GAAP is that IFRS extents across multiple countries and GAAP focuses only on U.S. organizations.
The statement of financial position that is reported under IFRS standards is the same to the balance sheet that is
reported under GAAP. Although both statements are prepared differently, they are intended to report shareholder
equity, liabilities and balance of assets.
Revenue Recognition
Since GAAP uses a principle based accounting, revenue recognition is based on principles that are definite for
individual companies, and different procedures apply to different forms of transactions. These procedures have
raised many concerns about revenue recognition due to developing businesses globally, however, it has been an ideal
alternative to the generic stand the IFRS maintains.
In 2014, the IASB released IFRS 15 Revenue from Contracts with Customers. This combined effort with the
Financial Accounting Standards Board (FASB), provided an organized, more structured framework for revenue
recognition in global accounting reporting. According to the IFRS 15 Revenue from Contracts with Customers report
put out by the IASB (2014),
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38.
39. Gaap Vs Gaap And Ifrs
Current GAAP
GAAP is an acronym for Generally accepted Accounting Practices. These a common set of accounting standards,
principles and procedures that are used by companies while compiling their financial statements. A combination of
standards set forth by policy boards and the commonly accepted ways of recording financial information, GAAP is
deemed necassary or companies to generate investor confidence. Any fundamental investor looking at a company for
long term prospects looks for consistency in the financial health. By insisting that companies adopt GAAP, the
government is able to provide Financial statements with a minimal level of consistency to potential investors. This
ensures that important factors like balance sheets and ... Show more content on Helpwriting.net ...
GAAP allows the shareholders' equity and any changes in it to be included in the notes in the appropriate financial
statements. IFRS, on the other hand, insists that the changes be incorporated in a separate statement (Ernst and
Young, 2012).
Yet another similarity lies in the treatment and analysis of the long lived assets. Under both systems the assets are
not tested individually. Rather, long lived assets with an undefined life are either tested annually for impairment, or
more frequently once impairment has been identified (Ernst and Young, 2012). Under both systems, the depreciation
is included in the financial statements and the depreciated value is considered for the subsequent year. The treatment
of foreign currency and its translation or exchange, despite the differences in determining the functional currency of
the business entity (Ernst and Young, 2012) is yet another area of concern.
Some of the major differences include the financial periods that are included for accounting purposes; the layout of
the income statement and balance sheet; the manner in which deferred assets and liabilities as well as debt is
presented in the balance sheet; (Ernst and Young, 2012) the classification of expenses in the income
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40.
41. Essay on Freddie Mac Ethics
Freddie Mac is in the home mortgage business. It is their jobs to help low income families find affordable housing.
Freddie Mac has been in business since 1970. They were created in order to get more American families in to their
own homes. Their mission statement says, "Our statutory mission is to provide liquidity, stability and affordability to
the U.S. housing market" (FreddieMac.com, 2014). Despite this honorable mission statement, Freddie Mac was
involved in a case of accounting fraud that went on from 1998 to 2002. The lack of ethics at this company started
with top brass setting the tone, and the rest of the company following suit.
Rather than being sticklers for following GAAP accounting principles and internal controls, this ... Show more
content on Helpwriting.net ...
According to HUD Freddie Mac and Fannie May are both GSE's, government sponsored enterprises, and in the U.S.
they are the two largest providers of home mortgages. They were created primarily to provide loans to
underprivileged and lower economic areas. They are not subject to taxes. They do not fall under the jurisdiction of
the Securities Exchange Commission. They have direct access to a 2.25 billion line of credit, and their rates are
significantly lower than their competitors, because of their government backing, (Housing and Urban Developement,
2001).
The reason the company bought these risky loans was because they have a much higher interest rate. Rather than
paying 3.53 or 4% interest on a home loan these people were forced to pay almost double that, between 6 and 7%.
The conflict of interest arose from the fact that Freddie Mac was the one whom the recipients of these loans had to
try to get refinancing from. They did not want to refinance the high interest mortgages into lower interest ones. This
caused them to have a conflict of interest. They were not interested in helping people to save their homes because
they were making money off the interest. Many people were in need of refinancing, which would effectively pay off
the higher interest rate loan and create a new loan with more affordable prices. Freddie Mac refused to help these
people out of their mortgages, effectively because they
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42.
43. Kuwait Case Study
Financial Practices
Doing business in Kuwait is difficult compared to other countries. Michigan State University's Global edge program
ranks Kuwait 101 out of 108 countries in ease of doing business (Kuwait Introduction, n.d.) One issue is the legal
requirement to have a local agent to legally do business in the country. Kuwait Commercial Law No. 36 of 1964 and
Law No. 68 of 1980 requires foreign companies to contract with a Kuwaiti citizen to conduct business in the
Kingdom (Doing Business in Kuwait, 2017). This law requires the MNC to contract to the agent for no less than five
years (Sirdab_Lab, 2016). The MNC may only terminate the agent in the event of a breach of contract. This includes
contract renewal. If the MNC contracts with ... Show more content on Helpwriting.net ...
Oil accounts for half of the country's GPD and 95% of export revenue (Trade Policy Review, n.d.). Kuwait is also
focused on improving infrastructure and logistics. Current involvement by the Kuwaiti government in economic
activity is seen as substantial and a deterrent to business revenue (Trade Policy Review, n.d.).
Cultural and Ethical Environment
Individuals have their own ethical standards to varying degrees. Businesses have ethical standards in the same way
individuals do. Business standards in the United States are consistent with what most westerners would consider
ethical and proper marketplace behavior. Just because ethical dos and don'ts appear self–evident in the United States
one should not assume these ethical standards can be applied globally. With global expansion, western business
leaders should practice cultural awareness while setting acceptable business standards (Cotton, 2017).
Cultural Practices
Social problems in Kuwait are primarily drawn from the country's systemic hierarchies. In these hierarchies, groups
and individuals struggle to either improve or maintain their respective positions (Kuwait, n.d.). The role of women
within these structures has been open for debate. Likewise, the degree to
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44.
45. Ethical Ethics Of GAAP
How do companies comply with GAAP provisions when they are faced with ethical dilemmas? What is GAAP?
"GAAP stands for generally accepted accounting principles. GAAP is a collection of commonly followed accounting
rules and standards used in financial reporting." (WhatIs.com) GAAP has specifications that include definitions of
concepts and principles, as well as industry specific rules. The purpose of GAAP is to ensure that financial reporting
is transparent and consistent from one company to another. Currently there is no universal GAAP standard and the
specifics vary from one location to another. In the United States, the Securities and Exchange Commission (SEC),
mandates that financial reports adhere to the GAAP requirements. The Financial ... Show more content on
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(n.d.). Retrieved February 18, 2018, from http://smallbusiness.chron.com/accounting–ethics–integrity–standards–
24246.html
Ethics in Accounting. (n.d.). Retrieved February 18, 2018, from
http://higheredbcs.wiley.com/legacy/college/kieso/0470374942/gate/Ethics_in_Accounting/ethics_in_accounting.html
Help for Solving CPAs Ethical Dilemmas. (2009, April 01). Retrieved February 18, 2018, from
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46.
47. Essay on Ethics of Earnings Management
I enjoyed the conversation on GAAP and earnings management relating to the case "Be Careful What You Wish For:
From the Middle". The conversation was brief, but got me thinking on the ethics of earnings management. GAAP
accounting is to reflect in good faith the company's actual financial status and present reality as is. It is not to present
a manipulated set of numbers that paint a pretty picture. GAAP requires recording of revenue when there is
persuasive evidence of an arrangement, assurance of collectability, a fixed or determinable price, and delivery. If
Sarah recognizes revenue before delivery, she would violate GAAP and partake in channel stuffing. It would not be
earnings management. In my opinion, there is a fine line ... Show more content on Helpwriting.net ...
Although her actions would not violate GAAP, it would allow revenue to be manipulated to "paint a pretty picture"
for third–party users. I feel earnings management is saying, 'I know what the ending needs to be. What can I do to
achieve this end? What loophole exists?' Ultimately, if there is intent to deceive, I believe earnings management is
unethical. The case "Is This My Place?...Speaking "UP"' has been the hardest for me. I have found it difficult to
decide what I would do if I were in Ben's situation. I know it is wrong for donors to inflate the value of their
donations, but I would be afraid to say anything out of fear they might stop donating to the organization. Knowing
my manager was aware of the overstated donations and did not care would make matters worse. Unless I had a clear
plan to present to him, I would remain quiet. If donations stopped, individuals in need of medical supplies would
suffer. In weighing the options, I see the pros and cons of each side. By letting donors continue to overstate donation
amounts, donors remain happy, the organization continues to receive donations, and those in need benefit. On the
other hand, if someone does not put a stop to the overstatements, they could continue indefinitely and grow bigger
over time. Additionally, if the IRS were to find out, the not–for–profit's reputation would be tainted and donors
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48.
49. Hcs 405
Reporting Practices and Ethics
HCS/405
Reporting Practices and Ethics
A major aspect of health care organization operation is that of financial management. Financial management of
health care organizations incorporates ethical standards and proper reporting practices. Financial practices and
ethical finance concerns are important to the success of any organization, particularly within the health care industry.
The four elements of financial management, generally accepted accounting practices (GAAP), and general financial
ethics standards are part of ensuring fair and accurate financial reporting from health care organizations. Examining
examples of ethical standards of conduct and reporting standards helps to understand the ... Show more content on
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" In order to prevent fraudulent financial reports and statements, the American Institute of Certified Public
Accountants(AICPA) has created ethical standards" (Ethical standards in a financial statement, 2011). These
standards aim to make financial professionals accountable for their accounting practices. This includes the integrity
of financial reporting and ensuring financial reporting is done fairly and factually. Financial accountants and
professionals should maintain professional integrity, objectivity, and independence to reduce the risk of resulting
legal action, loss of profits, and a poor reputation if improper financial reporting is done (Ethical standards in a
financial statement, 2011).
Examples of Fraudulent Financial Reporting in Health care
According to the article Anatomy of a Financial Fraud (2004),
A forensic audit conducted by PricewaterhouseCoopers concluded that HealthSouth Corporation 's cumulative
earnings were overstated by anywhere from $3.8 billion to $4.6 billion, according to a January 2004 report issued by
the scandal–ridden health–care concern. HealthSouth acknowledged that the forensic audit discovered at least
another $1.3 billion dollars in suspect financial reporting in addition to the previously estimated $2.5 billion. The
scandal 's postmortem report
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50.
51. Accounting Principles And Financial Statements
Statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP), which refers to a set
of rules, standards, and practices. They are used throughout the accounting industry to prepare and standardize
financial statements that are issued and help investors and creditors compare companies within the same industry.
Companies are expected to follow generally accepted accounting principles when they report their financial
information. GAAP affects the measurement of economic activities and the disclosure of information about
activities. It also affects the preparation and summarization of economic information, and the record keeping of
measurements at average intervals.
Other than the numbers on the balance sheet, income statement, and statement of cash flows, a great deal of
information is provided in the notes to the financial statements. They contain information that may be significant and
include tables which are included as a footnote. The notes will contain information about the company accounting
policies, including information on securities held, inventories, debt, and other elements which can determine a
company 's financial position. Under GAAP, companies often have discretion to use varying methods for valuing
assets, and recognizing costs and revenue. The "Summary of Significant Accounting Policies" appears as the first
note to the statement or in a separate section.
Accounting control procedures are systems designed to ensure all employees
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55. Differences Between Gaap And Gaap
Differences between U.S. GAAP Revenue Recognition and IFRS Revenue Recognition Revenue recognition is the
accounting principle that deals with the time and method to place income on the books once the earnings process is
complete. The United States Generally Accepted Accounting Principles (U.S. GAAP) is a rule based system that
accountants must adhere to when performing accounting tasks. The U.S. GAAP revenue recognition rules allows for
exceptions to certain transactions and requires companies to also follow regulations promulgated by the Securities
and Exchange Commission. Conversely, the International Financial Reporting Standards (IFRS) is a principle based
system that advocates for certain accounting principles that should be applied to all contracts and industries. The
IFRS standards are created by the International Accounting Standards Board. In general, the U.S. GAAP accounting
framework provides numerous rules on the issue of revenue recognition. Moreover, the U.S. GAAP rules are broken
into categories based on the particular industry involved. Some of the industries that have specific U.S. GAAP rules
are software and real estate. The IFRS system creates principles that should be applied to all industries without
exception. The U.S. GAAP revenue recognition rules focus on realized or realizable revenue and whether it is
earned. Conversely, IFRS revenue recognition principles focus on the whether there are potential economic benefits
from a transaction and, if so,
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56.
57. GAAPAnd IFRIS
Principles of GAAP and IFRIS
GAAP– GAAP (generally accepted accounting principles) is a collection of commonly–followed accounting rules
and standards for financial reporting.
Principles regarding GAAP
1. Economic Entity Assumption
The accountant keeps all of the business transactions of a sole proprietorship separate from the business owner 's
personal transactions. For legal purposes, a sole proprietorship and its owner are considered to be one entity, but for
accounting purposes they are considered to be two separate entities.
2. Monetary Unit Assumption
Economic activity is measured in U.S. dollars, and only transactions that can be expressed in U.S. dollars are
recorded.
Because of this basic accounting principle, it is assumed ... Show more content on Helpwriting.net ...
It is imperative that the time interval (or period of time) be shown in the heading of each income statement,
statement of stockholders ' equity, and statement of cash flows. Labeling one of these financial statements with
"December 31" is not good enough–the reader needs to know if the statement covers the one week ended December
31, 2014 the month ended December 31, 2014 the three months ended December 31, 2014 or the year ended
December 31, 2014.
4. Cost Principle
From an accountant 's point of view, the term "cost" refers to the amount spent (cash or the cash equivalent) when an
item was originally obtained, whether that purchase happened last year or thirty years ago. For this reason, the
amounts shown on financial statements are referred to as historical cost amounts.
Because of this accounting principle asset amounts are not adjusted upward for inflation. In fact, as a general rule,
asset amounts are not adjusted to reflect any type of increase in value. Hence, an asset amount does not reflect the
amount of money a company would receive if it were to sell the asset at today 's market value. (An exception is
certain investments in stocks and bonds that are actively traded on a stock exchange.) If you want to know the
current value of a company 's long–term assets, you will not get this information from a
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58.
59. Ethic Paper
Ethics Paper
Ethics Paper Financial Management is one important part of health care financial planning. Many financial decisions
are made on a day to day basis from all the accounting records and all the business transactions which occur. Some
are the decisions made according to the organizations fiscal objectives although some are made on generally
accepted accounting principles). So the question I would ask is this "How good is the financial management of our
health care organizations and do they hold a good financial reporting records"? GAAP The ... Show more content on
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All organizations are different so normally corporate behavior is based mostly on the ethics of the corporation or
organization. Most organizations focus on the organizations surroundings, social and human rights, and
responsibilities when looking at what emotions the ethics have within the organization. The GAAP standards are
combined into all corporations' ethic policies and have reference to the way they handle all their financial guidelines
cut out throughout the organization financial accountants. With some health care organizations operating differently
and with different principles and techniques each needs to look at their own code of ethics when they grasp the
corporation's business affairs. Each organization, exercise the power of sight at ethics in different ways. One
organization may not see that by making an offering of a few dollars on a piece of health care equipment or special
supply a patient needs worth the ethics involved thou the lack of patient process. Then you have an organization may
find ways to not buy the equipment or supply that the patient needs because the organization has to render pay for it
not the patient. Depending on the patient many individuals see health care facilities as good and on the other hand,
some see it as bad based on the code of ethics within the organization he or she have had an affect on or been
involved with. Patients can see just by experiencing involvement with the health care professionals and their manner
of
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60.
61. The Convergence Of Gaap And Ifrs
"A review of information about the convergence of GAAP and IFRS" Revenue recognition is one of the major areas
that a convergence of Generally Accepted Accounting Principles (GAAP) and International Financial Reporting
Standards (IFRS) unleashes its fiery wrath on US domestic and global businesses. GAAP are the accounting
principles that United States domestic companies currently use. GAAP was made and is regulated by the Federal
Accounting Standards Board, known as FASB, established in 1973. This is a discussion of GAAP and IFRS, and
how GAAP regulations for revenue recognition compare to the principals of revenue recognition established by
IFRS standard IAS 18. IFRS was established by the International Accounting Standards Board (IASB) to develop
quality and transparent global accounting standards. The United States began working with the IASB and has been
on course to update GAAP to recognize the same accounting principles and standards as IFRS since 2002, after
signing the "Norwalk Agreement." The merger was originally scheduled for commencement in 2009 but was
postponed a couple of times, and it is now set to take effect December fifteenth of next year for US public
businesses. Revenue recognition is an accounting principal that determines when income from selling goods,
rendering of services, contracts resulting in interest, dividends or royalties can be measurable and will be recorded as
revenue. Revenue is the amount of money a business brings in during its
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62.
63. Ifrs and Gaap Convergence
Cruz 1
Week 8 Assignment 1 IFRS and GAAP Convergence Janet Rivera Cruz Prof. Basil Jackson Accounting 304
December 2, 2012
Cruz 2
The purpose of this paper is to describe what accounting convergence means and assess the likelihood of the
convergence being completed and implemented in the next five (5) years. IFRS is the principle based set of
standards that establish standards and dictate specific treatments. IFRS has become a global standard for companies
when preparing financial statements. IFRS consist of multiple reports stated on the Wikipedia website. The two
reports that will be discussed in the paper are IFRS and GAAP. GAAP is an Accounting Standard that provides
guidance for financial ... Show more content on Helpwriting.net ...
There is no universal GAAP standard and the specific vary from one geographic location or industry to another. In
the United States, the Securities and Exchange Commission (SEC) mandates that financial reports adhere to GAAP
requirements. The financial accounting standards Board (FASB) stipulates GAAP overall and the Governmental
accounting standards Board (GAAP) stipulates GAAP for state and local government. Publicly traded companies
must comply with both SEC and GAAP requirements. In recent years it also has had the chance to look at the United
States Generally Accepted Accounting Principles (GAAP) and modify the rules to enhance clarity and consistency,
intentionally setting itself apart from U.S. GAAP. The convergence of these two accounting frameworks is a must
for both foreign and domestic businesses. The International Financial Reporting Standards (IFRS) is the accounting
framework used by the European Union, Japan, Canada, and other world economic leaders. Companies need an
accurate and reliable financial accounting systems not matter if globally or in the United
Cruz 5
States. Companies should report income, liability, equity, and assets. Many people (stockholders, investors, etc.) who
have a stake in the company want to know this information before providing a service. In this paper, International
Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) will be compared
for
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64.
65. U.s. Gaap And Ifrs
Financial Reporting
As of today, there are still many differences between U.S. GAAP and IFRS, but this term paper is to research on
some accounts that impacted or will impact the financial statement reporting when U.S. GAAP converged with
IFRS, focusing on these accounts: extraordinary items, warranty expense accruals, acquisition costs, capitalized
leases, inventory, and ing contingency.
Extraordinary Items
U.S. GAAP reports extraordinary items on the income statement separately from the ordinary operations under the
Income from continuing Operations, net of tax. IFRS does not isolate extraordinary items on the income Statement.
Prior to update on how to report extraordinary items, there are two criteria used to classify an event as an ... Show
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This update will align U.S. GAAP income statement presentation guidance with IAS 1, which eliminates the
presentation of extraordinary items (FASB, ASC 225–20–20).
Warranty Expenses Accruals
Using historical information of warranty expenses, U.S. GAAP accrue warranty expense as a percentage of revenue.
Accrual should take place in the same reporting period in which the related product sales are recorded. By doing so,
the financial statements most accurately represent all costs associated with product sales, which will indicate the true
profitability associated with those sales (Accounting Tools–Warranty Accounting, n.d.). An extended warranty is
determined by the standalone price of the maintenance contracts, sold separately from the products; and to be defer
and recognized over the contract term. There is no relative fair value allocation each component of the sold if the
product is sold together. Warranty expense journal entries are shown in exhibit I.
IFRS offset accrue warranty expense against revenue. If warranty is part of the product sales, then recognize revenue
at the time of sales. Future cost related to the warranty will be recorded as a cost of sales as the warranty does not
represent a return of any part of the sales price. The estimated warranty cost will be calculated at the time of sale and
a provision is recognized. If unable to estimate the cost of warranty, then no revenue is recognized prior to the
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66.
67. Excello Telecommunications
The Ethicality of Excello Telecommunications Cody S. Smith ETH/376 April 22, 2013 Ding Hardin The Ethicality
of Excello Telecommunications Excello Telecommunications has been a profitable company for many years, but
recently the competitive landscape has become tougher. Competition from overseas manufacturers has lowered
Excello's market share and profits. For the first time it looks as is Excello will not meet earnings estimates. This
information directly impacts bonuses, stock options, and the company's share price. Top level management is
concerned about the extent this impact will have on the company. This paper will serve to determine the ethicality of
Excello's actions and demonstrate what ethical standards and regulations ... Show more content on Helpwriting.net
...
In this case the CFO is knowingly omitting a material fact to improve the company's financial statements. The
second option the accounting team came up with was to transfer the product to Data Equipment by December 31 and
agree that the customer could return it for a full refund after it arrives at Data Equipment's warehouse. This option is
very unethical. Essentially Excello wants Data Equipment to purchase this product and take delivery of this product
prior to December 31, 2010 but will allow Data Equipment to return the product for a refund after the new year. This
option seems to be set–up for failure. Excello wants to record this transaction so badly; they are willing to refund
this purchase after the new year just to show an additional sale for 2010. This option puts Excello at risk to start
2011 in the black. Having a sale this large returned will be hard to recover from. This option does not violate the
revenue recognition principle, but does violate section 401 of the SOX act. Unless the company discloses this
information on the balance sheet, Excello would violate this section of the ACT. As for violating the AICPA code of
conduct, this option is not part of an ethical practice. It is similar to a salesperson buying a product themselves to
attain something in return, and returning the product the next
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68.
69. Excello Telecommuncations
RUNNING HEAD: EXCELLO TELECOMMUNICATIONS CASE
Excello Telecommunications Case
Kevin C
ETH/376
February 10, 2014
Excello Telecommunications Case
The year is quickly ending for Excello Telecommunications, and they are trying to maximize earnings for the
company. With increased competition from foreign companies, Excello meeting its financial estimates are looking
bleak. Failure to meet earnings expectations can reduce the availability of bonuses, stock options and could lessen
the value of the company. Because of the threat in not meeting estimated earnings, the company's CFO Terry Reed
has a plan to make one last effort to meet company goals. Terry Reed has knowledge about a sale of $1.2 million to a
... Show more content on Helpwriting.net ...
Section 401 forces companies the discloser of periodic reports from the company. Section 807 describes a clear
definition on the criminal penalties for executives who break the law.
Excello GAAP Accounting
Excello accounting standards in the case study shows that the CFO wanted to make a decision based on an operating
decision going against accounting standards. GAAP principles must be followed by Excello when preparing
financial statements. When the company releases the financial statements, it must be in compliance with GAAP.
With that in mind, the accounting department must also comply with GAAP principles when the $1.2 million sale is
posted. Excello must follow revenue recognition rules when the sale is recognized by the company. Revenues
resulting from selling inventory must be recognized at the date of the sale, often viewed under date of delivery. If the
company used accrual basis of accounting, the revenues are recognized when they are earned, and expenses are
matched with the revenues generated by the sale. So for Excello, the sale cannot be reported in 2010 because the sale
would occur in 2011. Because Excello still possess the goods at the end of the year, the sale recognition cannot
occur. The financial statements have to reflect the true accounting activities for 2010, so the reports are transparent,
reliable and consistent. If Excello went ahead and reported the revenue in 2010, the report will not be truthful and
unreliable for
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70.
71. Non Gaap Metrics
Introduction
The use of "tailored" accounting, also known as "non–GAAP" metrics has spread across many industries and is a
common practice among many companies. Public companies in the United States are required to follow Generally
Accepted Accounting Principles (GAAP). When public companies report their quarterly earnings they must be in
accordance with GAAP; however, companies may also include non–GAAP Metrics in their earnings report. Non–
GAAP Metrics refer to earnings results provided by public companies that do not conform with GAAP. The
Securities and Exchange Commission (SEC, 2002) defines a non–GAAP metric as an amount that:
"Excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included ... Show
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Non–GAAP metrics can provide investors with extra information about the company, and can help communicate
what earnings would have been had certain infrequent expenses not occurred during the accounting period. Non–
GAAP metrics also creates risks and challenges for investors due its inherent risk given its susceptibility to
management bias. Some of the risks include reduced comparability of companies within the same industry and
altered investor perception of earnings trends in the market as a whole and for individual companies. The motive
behind the increase in non–GAAP earnings is questionable and could be attributed to at least two distinct factors.
The first factor is management's desire to provide investors with additional insight into the company, and to help
investors identify core profitability by excluding certain infrequent expenses in the calculation of adjusted earnings.
The second factor is related to the Internal Revenue Service (IRS) regulations involving executive compensation.
According to (Balsam,
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72.
73. Legality and Ethicality of Financial Reporting
Legality and Ethicality of Financial Reporting
Petra Clark
ETH / 376
June 3, 2013
Ding Hardin
Abstract
Excello Telecommunications is a successful organization, but because of a growing rivalry, the organization has
begun to notice their earnings estimations might not be achieved. Excello's top administrators are worried how this
will impact the organization. We will look at possible options as well as their moral ramifications as well as the
federal laws which can be applied to the situation.
Legality and Ethicality of Financial Reporting
There are a number of rules that Excello must follow to comply with if it is to fall in line with accounting actions,
especially when it comes to posting dealing as well as financial ... Show more content on Helpwriting.net ...
Additionally as per the revenue recognition rule a sale can't be posted before the product has been supplied and in
this situation the equipment is still in Excello's possession. Finally the importance, dependability, and regularity
principle states the information included in the financial statements, needs to be related and is to help make informed
decisions. The information contained in these statements must be dependable and regular. Being regular simply
means that the accounting methods must be the same in every accounting interval. In this aspect Excello must be
conscious of these rules before making a decision about whether or not to post the sale in a different accounting
interval. Section 807, Criminal Penalties for Defrauding Shareholders of Publicly Traded Companies of SOX
describes the criminal penalties for fraud.
The AICPA Code of Professional Conduct is the foundation of ethical reasoning in accounting. The Code of Conduct
typically is used to discuss the ethical obligations of CPAs. The principles guide members in the performance of
their professional responsibilities and call for an unyielding commitment to honor the public trust. Although CPAs
cannot legally be held to these principles, they do represent the expectations for them on the part of the public in the
performance of professional services. Excello must be cautious to follow the rules of due care, general public
interest and honesty.
Mr. Reed wants to post
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74.
75. Assignment 2-3 Applied Accounting Research
Assignment 2–3 Applied Accounting Research Paper
FASB Codification Database Summary
For authoritative guidance on accounting rules, one must turn to the Financial Accounting Standard Board's
Codification. Since 2009, FASB has arranged the generally accepted accounting principles (GAAP) into an easier to
access format, known as the Codification. One of these pronouncements is FASB 235– Notes to Financial
Statements (FASB, ASC 235–10, 2009). In this pronouncement, the overall required structure of disclosure notes is
discussed.
There are five main points that the financial statement must contain to remain in conformance with the requirements
of this pronouncement. All financial statements issued must "present fairly financial position, cash flows, and results
of operations in accordance with generally accepted accounting principles (GAAP)" (FASB, ASC 235–10–05–3,
2009). Within the detail of these financial statements, the accountant must include a summary of significant
accounting policies (SSAP) (FASB, ASC 235–10–50–1, 2009). This required disclosure entails: the accounting
method followed, such as LIFO or FIFO; the manner of applying the accounting method; determination of the
method and any changes in financial position; and, lastly, the reason the accounting principle is best for the company
for revenue recognition and cost allocation. Also, if the basic financial statements are not presented together, it is still
required for each statement to include the SSAP
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76.
77. IFRS TO GAAP Essay
Comparing IFRS to GAAP
Craig Ronquillo
ACC/291
8 December, 2014
Joseph Bailey
Comparing IFRS to GAAP
I will be comparing IFRS to GAAP, and be discussing many ways these two get along with each other and see what
they do differently as well, they both have their ways of doing things which are easier but sometime even harder.
IFRS 8–1: What are some steps taken by both the FASB and IASB to move to fair value measurement for financial
instruments? In what ways have some of the approaches differed?
The fair value measurements does provide the users who have the financial statements with correct picture of the
value of the company's assets. The IFRS and GAAP, demand firms to include information that is essential to fair
value ... Show more content on Helpwriting.net ...
So when the asset is being look at under IFRS, it is required that all assets in its class must be treated with the same
evaluation method. IFRS 9–3: Some product development expenditures are recorded as development expenses and
others as development costs. Explain the difference between these accounts and how a company decides which
classification is appropriate.
The companies that use the GAAP standards have to expense all their research and development dues by reporting
them on the income statement. So when the technological viability has been there, it is optional for the firm to start
reporting costs as capital expenditures. This will allow the costs to be depreciated over the useful life that the tech
provides.
FRS 10–2: Explain how IFRS defines a contingent liability and provide an example.
The contingent liability is an obligation that could have a probability of occurring in the future. Items will not be
included in financial statements, but should be still in the notes. The organization will also be required to measure
the nature of the contingent liability in subsequent account periods. For example if a building of the company
exploded cause serious damage to other building, neighborhoods and the surrounding area then the contingent
liability would cover the fines and repairs, so that is one of
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