Company accounting ch1 tut working Essay

The board of directors has resolved to change the accounting policy for treatment of advertising expenditure. Previously, advertising expenditure has been expensed as incurred. Following extensive market research, the board has taken the view that benefits from advertising expenditure in the form of product awareness and increased sales will be received by the company over a 3-year period following the expenditure. Due to a recent fire and water damage to the company’s accounting records, details of advertising expenditure in prior years have been destroyed. Required: The board of directors has approached you for advice regarding the disclosures, if any, which are required for this change in accounting policy. As the change in accounting policy was voluntary, the provisions of paragraph 29 of AASB 108 are applicable as follows: the nature of the change  the reasons that applying the new accounting policy provides reliable and more relevant information to the extent practicable, the amount of the adjustment for the current and previous periods to each financial statement line item affected and, if applicable, the basic and diluted earnings per share the amount of the adjustment relating to periods prior to those presented to the extent practicable if retrospective application is impracticable, the circumstances that led to the existence of that condition and a description of how and from when the change in accounting policy was applied. To comply with paragraph 29, the change in accounting policy note may be worded as follows (other variations are possible): The board of directors has resolved to change the accounting policy for  treatment of advertising expenditure. Previously, advertising expenditure had been expensed as incurred. However, following extensive market research, the board has taken the view that benefits from advertising expenditure in the form of product awareness and increased sales and will be received by the company over a 3 year period following the expenditure. Accordingly, the board believes the new accounting policy will provide reliable and more relevant information. Retrospective application of this change in accounting policy is impractical following a recent fire and water damage which has destroyed the company’s accounting records. Note, insufficient information was provided in the case study to determine: the amount of the adjustments for the current period to each financial statement line item affected; calculation of basic and diluted earnings per share; and how and from when the change in accounting policy was applied. Case Study 3 – Materiality Antelope Ltd is a catering company specialising in providing catering services to remote area mine sites. The company has operations in Australia but during the current year it acquired significant long-term contracts in Pakistan and Nigeria. AASB 8 Operating Segments requires entities to disclose material segment information but Antelope Ltd has failed to comply with this requirement Required: Discuss whether the non-disclosure of information about operations in Pakistan and Nigeria would be material. Information is material if its omission or misstatement would influence the economic decisions of users taken on the basis of the financial report (the Conceptual Framework, paragraph QC11). The non-disclosure of information relating the existence of long-term contracts in both Pakistan and Nigeria would be material to the users of Antelope’s financial statement. Both countries are politically and economically unstable so there is a significant risk that these operations could be disrupted exposing Antelope  Ltd to potential losses on the contracts and other losses if corporate employees are harmed or property is destroyed. Disclosing the information allows users to factor in such risks into their predictions about the company’s future performance and position and ensures an informed decision is made. Furthermore, paragraph 12 of AASB 1031 notes: In deciding whether an item or an aggregate of items is material, the size and nature of the omission or misstatement of the items usually need to be evaluated together. In particular circumstances, either the nature or the amount of an item or an aggregate of items could be the determining factor. For example: an entity expands its operations into a new segment which affects the assessment of the risks and opportunities facing the entity (paragraph 12(b)(iii)). Practice QuestionsQAEWRT QUESTION 12.1 NOTE: This solution is only one possibility. Students may use alternative or average base amounts. 1.Unrecorded creditor’s invoices These invoices understate Expenses (purchases and service related expenses) and Accounts Payable by $62 150. Base Amount Error as % of base Profit before tax $352 000 17.7% (62 150/352 000) Payables (current) 316 000 19.7% (62 150/316 000) As the error is greater than 10% of both base amounts it is material and must be adjusted. If the invoices all relate to purchases within a perpetual inventory system the accounts affected are Inventories (current asset) and Accounts Payable (current liability) and there will be nil profit effect. 2.Sales invoices not processed These invoices understate both Sales Revenue and Accounts Receivable by $50 000. Additionally, Cost of goods sold (expense) is understated and Inventory (current asset) is overstated by $36 000. The profit effect is $14 000 ($50 000 – $36 000). Base Amount Error as % of base Profit before tax $352 000 4.0% (14/352) Sales Revenue 3 600 000 1.4% (50/3 600) Receivables (current) 621 000 8.1% (50/621) Inventory (current) 345 000 10.4% (36/345) The omitted invoices are material in relation to inventories and should be adjusted. 3.Bankruptcy of Debtor after reporting date The adjustment will increase Bad Debts expense by $89 120 and decrease Accounts Receivable by $89 120. Base Amount Error as % of base Profit before tax $352 000 25.3% (89 120/352 000) Receivables (current) 621 000 14.4% (89 120/621 000) The overstatement is material in relation to both base amounts and must be adjusted as it relates to conditions existing at reporting date. QUESTION 12.3 The significant variances between the provision for warranty and the actual repairs in the two years indicate that either the policy of using a percentage of net credit sales as a means of estimating warranty costs is not appropriate, or the percentage used is not adequate. The company needs to look at changing either its policy or perhaps simply increasing the percentage used. Past claims as a percentage of past net credit sales should provide a reliable measure. If a new percentage is adopted it will be applied prospectively (from 2015-16 on) according to AASB 108 paragraph 36. If the variance for 2014-15 was due to an error in calculation then, providing it is material, the figures for 2014-15 should be retrospectively corrected (according to AASB 108 paragraph 42) by the following entry: Retained earnings (1 July 2015)Dr 8 000 Provision for WarrantyCr8 000 Additionally, this would indicate that the variance in 2013-14 may be a one-off aberration. QUESTION 12.5 Release of investigator’s report on 1 August 2015 The release of the report and the decision that damages were payable by Antelope Ltd provide new information about conditions existing at the end of the reporting period given that the release of the noxious gases occurred in June 2015. At $750 000 the amount is clearly material (in relation to profit before tax of $360 000) and the following adjustment should be made: June 30Damages expenseDr750 000 Damages payableCr750 000 (Recognition of damages liability) Credit notes raised on 9 July 2015 As these credit notes relate to sales which occurred prior to the end of the reporting period this provides more information about conditions existing at 30 June 2015 and will (or may, depending on materiality) require adjustment by journal entry. However, as the credit notes represent only approximately 4% of profit before tax ($15 000/$360 000), it could be argued that no adjustment is necessary on the grounds of immateriality. The journal entry (ignoring materiality considerations) is shown below: June 30Sales returns and allowancesDr15 000 Accounts receivableCr15 000 (Credit notes relating to June sales) Liquidation of debtor As the liquidation was caused by an event after the end of the reporting period no adjustment will be made as this information does not change the situation that existed at 30 June 2015. However, the $52 000 loss (80 cents in the dollar x $65 000) will be material to next year’s profits based on  the current year’s profit before tax ($52 000/$360 000 = 14%), and must be disclosed by note. Antelope Ltd Notes to the financial statements year ended 30 June 2015 Note X:Events occurring after the end of the reporting period In September 2015, a debtor owing $65 000 went into liquidation. The company expects to recover only 20% of the amount owing.QUESTION AASB 108, paragraph 36 requires that the effect of a change in an accounting estimate shall be recognised prospectively by including it in profit or loss in the period of the change. New information in the form of debts which actually went bad during the year ended 30 June 2015 proved that the estimate of doubtful debts as at 30 June 2014 (last year) was inadequate and should have been $17 600 rather than $12 000. The amount of $5 600 ($17 600 – $12 000) in bad debts written off that was more than allowed for last year has been added to bad debts expense for the current year (i.e. prospectively) in accordance with paragraph 36. The balance of the bad debts expense for the current year, $23 400, is comprised of $17 800 (allowance for doubtful debts as at 30 June 2015 based on an analysis of outstanding account receivable balances) plus $5 600 (adjustment for underestimation of allowance for doubtful debts as at 30 June 2014). The key issue here is whether or not the change in the way Mousedeer Ltd estimates its doubtful debts is a change in an accounting policy. AASB 108, paragraph 35 states ‘A change in the measurement basis applied is a change in an accounting policy, and is not a change in an accounting estimate. When it is difficult to distinguish a change in an accounting policy from a change in an accounting estimate, the change is treated as a change in an accounting estimate.’ The asset here is Accounts Receivable, a financial asset which is measured at the lower of nominal value and recoverable amount. Where a debt is not expected to be collected in full it is  disclosed in the financial statements at its expected amount via the allowance for doubtful debt adjustment. The change in the way this ‘recoverable amount’ is estimated does not change the measurement basis and is therefore not a change in accounting policy. Mousedeer Ltd should disclose the nature and amount of any change in an accounting estimate (according to AASB 108 paragraph 39), usually in its accounting policy note.

A Series Of Unfortunate Events English Literature Essay

A Series Of Unfortunate Events English Literature Essay â€Å"Although he said he was the executor, Violet felt like Mr. Poe was the executioner.† The Bad Beginning is the first book in the book series A Series of Unfortunate Events written by Lemony Snicket. The Bad Beginning marks a tragic start to the series with the Baudelaire children becoming Baudelaire orphan to the series of unfortunate events that is to follow. The story began with the Baudelaire children (Violet, Klaus and Sunny) playing by the beach when the executor of their parents’ affairs, Mr. Poe, suddenly appears and tells them that their parents perished in a horrible fire. Depressed and lonely, the children who were now orphans were told that they would live with their closest relative, a man by the name of Count Olaf. Count Olaf treats the children poorly and forced them to perform chores every single day whilst cooking up a plan to steal their fortune. The Baudelaires soon come to realize this and made an attempt to find out about his plan. Count Olafâ €™s plan of marrying Violet during the play The marvelous marriage in order to obtain the Baudelaire fortune was known to the three Baudelaires. In an attempt to continue his plans, Count Olaf threatens to take the life of Sunny, the youngest Baudelaire, by dropping her from a 30 ft tower should the other two â€Å"misbehaves†. In a desperate attempt to escape this horrible fate violet signed the paper with her left hand instead of her right and waited to reveal this secret only after Count Olaf have released Sunny. However, Count Olaf escapes and vows revenge on the children. In the story, the main protagonists, the Baudelaire children, are a very talented bunch of children. Violet, who had â€Å"a real knack for inventing and building†, constructed a grappling hook from dirty cloths and a curtain rod. Klaus, â€Å"the middle child and the only twelve† have â€Å"read a great many books and had retained a lot of the information from his readings†. Su nny, who was only a baby, likes to bite things and is tiny in size. â€Å"What she lacked in size, however, she made up for with the size and sharpness of her teeth.† Count Olaf, whose name sounds like that of a vampire, is the main antagonist. He is a villain that tries to take the Baudelaire fortune. He is best characterized by the following thought from violet; â€Å"The really frightening thing about Count Olaf, she realized, was that he was very smart after all. He wasn’t merely an unsavory drunken brute, but an unsavory, clever drunken brute.† The Bad Beginning focuses clearly on one pessimistic theme; the theme of this novel is that the world can be tough and cruel, often getting worse as time progresses. The story first starts with Mr. Poe informing the children about the loss of their parents and gets worse with the introduction of Count Olaf as the Baudelaire orphan’s new guardian. The Baudelaire’s luck then gets even worse when Count Ola f becomes hell-bent on taking their fortune. Then the story reaches its climax (ironically the part with the Baudelaire orphans in the worst situation possible) when Count Olaf threatens to kill Sunny Baudelaire. Finally, at the end of the novel, even when Count Olaf’s plot has been revealed, he still manages to escape with all his assistants from the authorities vowing revenge against the Baudelaires.

Ask week 6 Essay Example | Topics and Well Written Essays - 250 words

Ask week 6 - Essay Example Explicate some of the benefits associated with the use of informal organization. Although informal organization is argued to promote and to continue social cultural values of the organization, it can also lead to negative attitudes between employees. Explain ways through which informal organization can lead to this effect. How do people who refuse to transfer knowledge to others in an organization affect the running of the organization? What are advantaged accrued from mentoring and knowledge transfer within the organization? The current formal setting within the organization affects decision making processes. It is apparent that the organization can be termed as a family business entity. In what ways is this scenario a barrier in paving way for successful and effective decision making processes? It can be argued that in order to resolve the land problem, this formal organizational structure needs to be challenged. In what ways can this structure be challenged? Do you see the use of informal organization playing a critical role to this

Guidelines for Risk Assessment Paper Research Example | Topics and Well Written Essays - 1250 words

Guidelines for Risk Assessment - Research Paper Example The result will be the ability to proceed into a business that can expand and overcome dangers of the business without accruing loss in the company. Since Cisco is a security based company for technology, most of the tangible risks are based on the ability to match security threats that occur through technological components. Security vulnerabilities that come from those that are attacking online portals are some of the strongest risks that are incorporated into the company. IT organizations and technological components are both at a risk because of specific technology architectures as well as the main way in which the hardware and software performs. This ranges by the method of attack that occurs on the system, usually which includes new and improved methods that can overcome older attacks while causing damage to the company’s technological components. This is furthered by day zero threats, which include changes in technology that enhance the attacks on technology without responses that can be completed by corporations (Bharania, 2010). The security vulnerabilities through technological attacks are not the only tangible problem within the corporation. There are also other problems that lie within the internal environment of the company, specifically through employee mistakes and unknown factors. Working in the IT industry is also dependent on innovations and new components that can be added into systems for implementation. AS this is done, it increases the amount of risk in the market. Even though there are end to end strategies, meaning that employees have to move through several levels before completing a product, there are still problems that may reach end users. The security, development and innovations that are completed will then have fewer demands and will cause the company to move into a lower rating with offering new securities. Since Cisco is known as a service provider

Cold War Essay Example | Topics and Well Written Essays - 2250 words

Cold War - Essay Example Soviet Union tried to empower communism all over the world while United States and its alliance supported many countries of the world to weaken the communism. After the end of World War II, the Soviet unions decided to spread communism all over the world. The United States determined to stop the spread of Soviet power and communism. For this purpose it provided much financial support to its alliance. The alliances were democracies that were not in favor of communists too. Though they were not able to stop the spread of communism in Eastern Europe, the U.S and Britain were determined to preserve Western Europe from the reach of communists. In the World War II Soviet Union has gained much popularity in the West Europe due to the resistance against the Nazi forces. So there was a chance of election of communist parties in France and Italy. Harry Trumann was the first US president started to fight the cold War. Britain was the first country that investigated for the nuclear weapons' development. In 1945, Britain was an activist world power. It possessed the second largest national navy, and its Empire-Commonwealth was genuinely global. The Dominions stretched from Canada to Australia, New Zealand and South Africa; it had colonial possessions from the north to the south of the African continent, to the east of Suez, in south and south-east Asia, as well as many scattered, and often strategic, island outposts. India was proclaimed as the 'jewel in the crown' of the Empire. A major problem for the historians analyzing the impact of military expenditure on the usual working of the economy of a country just after the war is the fact ignored by the liberal economic theory. This theoretical shortfall reflects the fact that the mobilization for industrial warfare can only be achieved through suspending the normal economic operation. While accepting necessity to plan the wartime economy, most British economists considered that after the hostilities and War activities, the resources will be allocated to the market as usual. This is what the liberal economists oppose. As a part of conversion, the British policy makers faced crucial situation about scaling down the Britain's efforts with its diminished economy and military power in the post war world. Alec Ciancross accepts that the Britain's Defence efforts may have been extraordinarily large and says that the real problem for Britain was the role it was asked to play was beyond its strength. But the other historians criticize the leadership of Britain who did not face the fact that Britain would not be able to meet the global military commitments. The question arises here is this that did the excessive military costs were responsible for low investment leading to weak economy of Britain Usually it seems to be answered that the short term expenses of the war would not affect the long term economy policies. Defence economists analyze short term and even small changes in the economy and

Television as a live medium Essay Example | Topics and Well Written Essays - 1500 words

Television as a live medium - Essay Example To say, hence, that it is â€Å"still alive† as if it is already clutching for dear life would be an understatement. The fact is that live television is a platform by which people are informed today. So long as there are events like disasters, sports, and political exercise such as election, among others, the relevance exists more than ever. The proliferation of canned television shows does not diminish it. Defining â€Å"Live† Bourdon (2000) explained that the concept of â€Å"live† television is fundamentally a label expressing a technological capability (532). It brings people from everywhere - whether at home, work, bars, even the streets - to events as they happen. In the discourse trying to specify the meaning of television and to differentiate it from the cinema, â€Å"liveness† is one of the three identified characteristics that made the medium unique (the other two are screen size and domestic reception) (532). â€Å"Liveness† also denotes the aspect of television that is identified with truth, facts and authenticity. Bourdon cited this point as he defined live television a live transmission of events to the viewers through the use of technological apparatus, making it a public phenomenon since it allows people to live event simultaneously (534). This definition implies two important characteristics. It is all about transmission of events as they occur and, at the same time, it is also about people viewing events together. The concept of â€Å"live† also assumed several meanings. Bourdon comprehensively cited many excellent examples. For example, when a singer does not lip synch in the performance, then it is called live musical performance. There is also the case of talk shows. Resource persons are invited and are moderated by hosts to tell the audience about their lives or to discuss interesting topics (Bourdon, 532). Bourdon argued that live television is present in many programs and television sequences (53 3). This variable indicates the persistence and permeation of live broadcast even on genre that are not classified with news and reporting on current affairs. Bourdon, called this socio-semiotic unity, a fundamental force that ensures the persistence and survival of â€Å"live† television throughout history (532). Out of all the definitions, White helpfully pointed out that â€Å" liveness† is the ultimate concept that â€Å"subsumes a host of other qualities and characteristics† and that it â€Å"serves as â€Å"an anchor for the properties considered essentially televisual - immediacy, presence, reality effects, intimacy and so on† (81). Covering Catastrophe The recent devastation wrought by the super typhoon Haiyan both to human lives and to property in Tacloban City, Philippines is the most recent testament not only to the viewers’ recognition and acceptance towards â€Å"live† broadcast but also its relevance and contribution to televi sion as a medium. Certainly, the most advanced technologies have enabled many reporters to cover the event live as the storm raged even when power, communications and transportation became unreliable. Reports were beamed from the city to the United States as the storm unfolded real time. The static and interference in transmission all served to highlight the catastrophe in the process of flattening

International Human Resoerce Managmanet Assignment

International Human Resoerce Managmanet - Assignment Example As co-operation processes play a central role in teams we focus on processes centered on co-operation in and between groups with teams understood as social systems which define themselves in relation to their organizational and social surroundings"(Brewster, Harris, 279: 1999). So the culture needs to be considered here, culture means the norms, the traditions, and the values, in the case of MPS we have to bring the same culture and ways of working that are being followed in the USA to all the subsidiaries, this is the only way to survive and to have the same success that the USA based MPS achieved, another important thing that should be kept in mind prior to culture is the mentality of employees in subsidiaries, which should be similar to the employees of parent company. No matter where you are from, no matter what are your preferences but you should be very much competitive in working and should be a hard worker, so from this point of view the company has to make slight adjustments in their recruitment and selection policies, more importantly, the company is a very popular one and not an ordinary company which is having poor market everywhere, so they need to bring in the best talent of Europe in their company, this is all possible by proper interviewing and keeping a selection criteria, where communication barriers are occurring the company needs to form a new policy, they can bring in the natives at the executive positions so that it would be very easy to give them incentives and through them communicating the union to work effectively. Also there is another policy that should be formed and that is instead of bringing in all the employees for the training program, the parent company should call the executives of the native countries to the USA and then give them training and also instructions so that they can give similar instructions to their employees in the native country, this would for sure help the employees to understand the rules and regulations in a better way because they would be taught and instructed by their own people.