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Requiring more be added onto this document that was already completed. Received a notice to revise/add more information and to provide more sources. Minimum 8 sources. Page count needs to be a minimum of pages single spaced not including cover page and citation page.


7/7/22, 9:33 PM FASB Research Tracker Milestone - ACCT 310 6980 Intermediate Accounting I (2225) - UMGC Learning Management System https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1279579&grpid=0&isprv=0&bp=0&ou=684162 1/3 ACCT Assignments and Submissions Course: ACCT 310 6980 Intermediate Accounting I (2225) Content and Accuracy (50) Excellent Very Good Good Satisfactory Poor Did not Complete Criterion Score Student's submissi on appropria tely addresse s questions or calls to action including on time submissi on / 5050 points 45 points 40 points 35 points 30 points 0 points Quality of Submissio n (30) Excellent Very Good Good Satisfactory Poor Did Not Complete Criterion Score 7/7/22, 9:33 PM FASB Research Tracker Milestone - ACCT 310 6980 Intermediate Accounting I (2225) - UMGC Learning Management System https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1279579&grpid=0&isprv=0&bp=0&ou=684162 2/3 Quality of Submissio n (30) Excellent Very Good Good Satisfactory Poor Did Not Complete Criterion Score Student’s submissi on displays critical thinking, analysis, and appropria te research and applicatio n of resources / 3030 points 27 points 24 points 21 points 18 points 0 points Originality (10) Excellent Very Good Good Satisfactory Poor Did Not Complete Criterion Score Submissi on written in student’s own words. In-text citations included if required / 1010 points 9 points 8 points 7 points 6 points 0 points 7/7/22, 9:33 PM FASB Research Tracker Milestone - ACCT 310 6980 Intermediate Accounting I (2225) - UMGC Learning Management System https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1279579&grpid=0&isprv=0&bp=0&ou=684162 3/3 Total / 100 Overall Score Communic ation (10) Excellent Very Good Good Satisfactory Poor Did Not Complete Criterion Score Communic ation (10) Excellent Very Good Good Satisfactory Poor Did Not Complete Criterion Score Student’s submissi on shows a high- degree of effective communi cation and presentat ion of informati on including on time submissi on. / 1010 points 9 points 8 points 7 points 6 points 0 points Excellent 100 points minimum Very Good 90 points minimum Good 80 points minimum Satisfactory 70 points minimum Poor 60 points minimum 0 Points 0 points minimum FASB Report: ACCT 310 TOPIC: Disclosure of Supplier Finance Program Obligations Soyoon Yoon History The FASB, ‘Financial Accounting Standards Board” came up with a proposal which they wanted to amend which says that the entities that use any kind of supplier finance to pay for the goods purchased by them need to disclose all the key terms and information about the obligations which they have as a result of using the supplier finance at the end of each reporting period. The proposal went for stakeholders’ analysis to see how viable the project is and what the implication that the stakeholders will face as a result of this amendment both from the qualitative and quantitative points of view. The proposal was not intended to make any change in the recognition, measurement, or presentation of financial statements for supplier finance program obligations, which are already classified as trade payables or bank debt (Cornejo 2018). For determining whether supplier finance has been used or not the arrangement between the entry and the finance provider, other than the supplier will be looked at. The determination will be confirmed if the entity who is obligated to pay is paying to someone other than the party, here it will be clear that supplier finance has been used. Supplier finance has become such a popular concept in the world because of the potential that it gives to the parties involved: Monetization of trade receivables: The owner of trade receivables gets instant cash and the program helps them reduce their credit exposure. Extended payment terms: Because the owner of trade receivables has the option to see the trade receivable, they can give the buyer an extended credit period. Operational benefits: The optimization of various processes And many others Supplier finance as a concept has been there for a long but the increase in usage is seen in the last couple of years, and therefore the FASB wants to make sure that the disclosures are on the right way going forward. This will ensure better decision-making and low frauds which can otherwise take place. Introduction The supplier finance arrangement has an entity that buys the goods or services on credit, which is also known as the purchaser, and there is the bank that makes the payment to the good supplier, the bank here is known as the financial institution or the intermediary and the seller who is selling the goods is the supplier. Supplier finance is also known as reverse factoring which is a solution designed by the creditors and large financial institutions to help medium and small enterprises pay off their suppliers immediately by getting a longer-term payment structure from the intermediary or the one who is providing the finance in this case. The benefits of supplier finance are: Improvement in working capital position: With supplier finance, the longer payment that the company has to receive can be converted into cash and this can improve the cash conversion cycle of the company which will improve the working capital position of the company as now the company will need less working capital to fund its current liabilities (Tunca 2018) Strengthening relationships: The use of supplier finance also strengthens the supplier relationship as it makes sure that the suppliers are paid up front and the payment can be made to the financial intermediary at a subsequent interval which does not involve the supplier anymore Current Status The current status of the program is that the following disclosures are mandatory for the party who is undertaking supplier finance to make the payment, this will ensure that all the disclosures are done, and the amendment is successful. All the items related to the program which the company and its management can identify Amount outstanding at the end of the reporting period Any obligations which are rolled forward, using the following calculations = Amount outstanding at beginning of period + any amount added during the period – amount settled during the period – amount outstanding at the end of the period The proposal is still in the discussion phase and will apply retrospectively to all companies and all periods. This will ensure the perfect way to disclose everything and make sure that it is making sense. The effective date for this has not been determined yet, as the FASB (Financial Accounting Standards Boards) is still waiting for the analysis by the stakeholders to implement the program. Implications The implication of this amendment and disclosure will be on the buyer of the products and services, i.e., the supplier finance products, which mean that any of the buyer going forwards will need to make a disclosure which is stated above as required by the FASB (Financial Accounting Standards Board) if they are using the supplier finance program. This disclosure will impact the balance sheet which will have all the details and also the notes to accounts which will have the detailed disclosure of the key terms and other values which are required to be disclosed. Because of the benefits, supplier finance has it does not have very high implications on the financial statement disclosure that the FASB (Financial Accounting Standards Board) is proposing. This disclosure is mainly to make sure that all the companies which are using it intensively can get it disclosed in the financial statements at the end of each reporting period to make the investors aware of the financial position of the company, without the disclosure of the financial position of the company seems very good even though they may be selling a lot of goods on credit. Conclusion Overall the program will be effective as it can be sensed that this will give the investor who wants to invest in the company more information on the supplier finance things which is also a material thing and can impact the decision of the investor because in the balance sheet the firm using the supplier finance may decrease the trade receivables and increase the cash as a result of using the supplier finance and transferring a whole lot of trade receivables to the supplier finance entity. After going through the documents and research I believe that this disclosure is very important because until now any company using supplier finance discloses whatever they want to and does not have a set of things which need to be disclosed that can impact the investors. But after the amendment when the program becomes effective this will change, and the buyer of the supplier finance will have to make sure that the disclosure is done according to the accounting standards which must be followed by the company. References Cornejo Fernández, H. H. (2018). How do companies report information about their suppliers in their non-financial reports. FASB Proposes to enhance transparency around supplier finance programs, FASB, retrieved on 10th July 2022, from https://www.fasb.org/page/getarticle?uid=fasb_Media_Advisory_12-20-21_Body_0228221200&isNewsPage=true Tunca, T. I., & Zhu, W. (2018). Buyer intermediation in supplier finance. Management Science, 64(12), 5631-5650. Yan, N., He, X., & Liu, Y. (2019). Financing the capital-constrained supply chain with loss aversion: Supplier finance vs. supplier investment. Omega, 88, 162-178. Appendix A – Research Tracker No. Date Question Pursuing, Information Sought, Rationale for Search Tool or Source Used Concepts or Keywords, Terms, Phrases Search Strategy Results Decision, Action, Next Step 1 01/07/2022 Context and History FASB Website, and other journals Disclosure of Supplier Finance Program Obligations FASB Reports FASB has a great implication for the topics To get the status of the program 2 03/07/2022 Current Status FASB website, published journals Supplier Finance Program Journals, Keywords, etc. Implemented Implications 3 05/07/2022 Implications Website, journals Supplier Finance Keywords Awaiting response from stakeholders
Answered 5 days AfterJul 21, 2022

Answer To: Requiring more be added onto this document that was already completed. Received a notice to...

Tanmoy answered on Jul 24 2022
65 Votes
FASB Report: ACCT 310
TOPIC:
Disclosure of Supplier Finance Program Obligations
Soyoon Yoon
History
The FASB, ‘Financial Accounting Standards Board” came up with a proposal which they wanted to amend which says that the entities that use any kind of supplier finance to pay for the goods purchased by them need to disclose all the key terms and information about the obligations which they have as a result of using the supplier finance at the end of each reporting period (Murphy, O’Connell & Ó hÓgartaigh, 2013).
The proposal went for stakeholders’ analysis to see how viable the pro
ject is and what the implication that the stakeholders will face as a result of this amendment both from the qualitative and quantitative points of view.
FASB is the Financial Accounting Standards Board (FASB) which was developed in the year 1973 as an autonomous, private based and non-profit organization located in Norwalk, Connecticut. The FASB helps in establishing the financial accounting and reporting standards which needs to be adhered by the public and private companies as well as the non-profit organizations which adheres with the Generally Accepted Accounting Principles (GAAP). Further, FASB is recognized by the US Securities and Exchange Commission as the authorised setter of accounting benchmarks for the various public sector companies. Further, it is FASB which is delegated as the authoritative body for regulating numerous organizations which also includes the Boards of Accountancy and American Institute of CPA’s (AICPA) (Brown & Feroz, 1992). Further, it’s the FASB which edifices as well as issues various financial accounting standards which is based on a transparent and comprehensive method which is intended for promoting the financial reporting and also provides crucial information to the investors and various other stakeholders or users of the financial reports (Lee, 2006).
The proposal was not intended to make any change in the recognition, measurement, or presentation of financial statements for supplier finance program obligations, which are already classified as trade payables or bank debt (Cornejo 2018).
For determining whether supplier finance has been used or not the arrangement between the entry and the finance provider, other than the supplier will be looked at. The determination will be confirmed if the entity who is obligated to pay is paying to someone other than the party, here it will be clear that supplier finance has been used.
Supplier finance has become such a popular concept in the world because of the potential that it gives to the parties involved:
Monetization of trade receivables: The owner of trade receivables gets instant cash and the program helps them reduce their credit exposure.
Extended payment terms: Because the owner of trade receivables has the option to see the trade receivable, they can give the buyer an extended credit period.
Operational benefits: The optimization of various processes
And many others
Supplier finance as a concept has been there for a long but the increase in usage is seen in the last couple of years, and therefore the FASB wants to make sure that the disclosures are on the right way going forward. This will ensure better decision-making and low frauds which can otherwise take place.
Introduction
The supplier finance arrangement has an entity that buys the goods or services on credit, which is also known as the purchaser, and there is the bank that makes the payment to the good supplier, the bank here is known as the financial institution or the intermediary and the seller who is selling the goods is the supplier.
Supplier finance is also known as reverse factoring which is a solution designed by the creditors and large financial institutions to help medium and small enterprises pay off their suppliers immediately by getting a longer-term payment structure from the intermediary or the one who is providing the finance in this case. FASB is a private-sector body which consists of seven members who works on full time basis. The ultimate mission of the FASB is towards improving and establishing a standard with respect to financial accounting along with reporting with respect to the guidance as well as the education of the citizen in general (Hashim, Li and O’Hanlon, 2016). These citizens consist of issuers, auditors and users of the financial information. The issuance of the accounting standards is crucial for efficient functioning of the economy as the decisions with respect to the resource allocation is significant for the smooth operations of the economy. Therefore, the allocation of the resources is based on the reliable, brief, transparent and understandable financial information. Thus, it is FASB which helps in developing accounting standards and various concepts for the purpose of financial reporting. Hence, FASB’s conceptual structure helps in developing a commanding framework which is entirely developed on the goals and fundamentals of the boards financial accounting (Pate & Stanga, 1989).
The benefits of supplier finance are:
Improvement in working capital position: With supplier finance, the longer payment that the company has to receive can be converted into cash and this can improve the cash conversion cycle of the company which will improve the working capital position of the company as now the company will need less working capital to fund its current liabilities (Tunca 2018). It is the proposal of Accounting Standards update which will have an impact on the programs directed towards the supplier finance with respect to the purchase of goods and services. In the supplier finance program, the buyers of goods and services are allowed for offering the suppliers the option for making payment through a third party in advance against the due date. Therefore, it is based on the invoice which the buyer has confirmed as lawful and forms a part of...
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