Answer To: HA 3011 Advanced Financial Accounting Assessment item 2 — Assignment Due date: 11.59 pm Friday Week...
Abr Writing answered on May 12 2020
HA 3011 Advanced Financial Accounting
Table of Contents
Assessment Task Part A 3
Assessment Task Part B 5
a. Public Interest Theory 5
b. Capture Theory 5
c. Economic Interest Group Theory of regulation 5
Assessment Task Part C 6
Assessment Task Part D 7
a) What might motivate the directors to not reassess the value of the equipment property and plant? 7
b) What are some of the effects the decision not to reassess the value might have on the financial statements of the company? 7
c) Whether the decision of not revaluing the assets affects adversely the shareholders wealth? 8
References 9
Libby, R., 2017. Accounting and human information processing. In The Routledge Companion to Behavioural Accounting Research (pp. 42-54). Routledge. 9
Assessment Task Part A
The qualitative characteristics of financial reporting Comparability, Verifiability and Timeliness do not appear to be satisfied by the current reporting practices pursuant to the IFRS. According to these three qualitative characteristic of the financial reporting, the information can only be useful for the reporting entity when it is utilized with due care and responsibility.
· Comparability: According to this characteristic, information about an organization of reporting is useful when only it can be comparable with a similar kind of detail and information about the other organizations and with having the same and similar information and details about the similar organization for another date or another period of time (Libby, 2017). The characteristic “Comparability” enables the user of the report to recognize, identify and understand the similarities in, and the differences among all the items.
· Verifiability: According to this characteristic, it assists to give surety to the users that the details and the information showcases the phenomenon of economics faithfully for which it claim and contends to showcase. According to this, the diverse independent and knowledgeable observers could reach the unanimous consent, although not necessarily the whole and entire agreement, about that particular true and realistic depiction.
· Timeliness: Timeliness basically means that the details and the information are present to the makers of the decision in time to be able of affecting and manipulating their decisions (Kotler, 2015).
Yes, the views are consistent with the view that the financial reports of the company satisfy the core and central objectives of the financial reporting according to the conceptual framework.
The Framework, which identifies the principal instructions of users of an entity’s standard purpose financial statements, states that the goal of financial statements is to offer the records approximately the financial role, overall performance, and adjustments in financial function of an entity that is useful to a huge variety of users in making financial decisions and selections; and to expose the results of manager’s stewardship (Baldwin, et. al., 2012).
The Framework specifies the features that make economic information useful; particularly, understandability, relevance, reliability, and comparison. It also defines the basic elements of financial statements (assets, liabilities, equity, profits, and expenses) and discusses the standards for spotting and measuring them.
The Framework's purpose is to assist the IASB in developing and revising IFRSs which can be primarily based on steady principles, to assist preparers to develop constant accounting rules for areas that are not blanketed via a trendy or wherein there may be a choice of accounting policy, and to help all parties to understand and interpret IFRS.
inside the absence of a general or an Interpretation that mainly applies to a transaction, management have to use its judgment in developing and making use of an accounting coverage that outcomes in facts this is relevant and dependable. In making that judgment, IAS 8.11 requires the management to recall the definitions, popularity standards, and dimension ideas for property, liabilities, earnings, and prices within the Framework. This elevation of the significance of the Framework was introduced within the 2003 revisions to the IAS...