Assessment Task Part A
In an article entitled ‘Unwieldy rules useless for investors’ that appeared in the Australian Financial Review on 6 February 2012 (by Agnes King), the following extract appeared. Read the extract and then answer the question that follows.
Millions of dollars have been spent adopting international financial reporting standards to help investors make like-for-like comparisons between companies in global capital markets. But CFOs say they are useless and have driven financial disclosures to unmanageable levels. The criticism comes as the United States, the world’s largest capital market, decides whether to retire its domestic accounting standard (US GAAP) and adopt IFRS.
“In seven years I never got one question from fund managers or investment analysts about IFRS adjustments,” former AXA head of finance Geoff Roberts said. “Investors...rely on investor reports and management briefings to understand companies’ numbers.”
If analysts did delve into IFRS accounts, they would most probably misinterpret them, according to Wesfarmers finance director Terry Bowen. “Once you get into the notes you have to be technically trained. If you’re not, lot of it could be misleading,” Mr Bowen said.
Commonwealth Bank chief financial officer David Craig said IFRS numbers were disregarded by investors because they could actually obscure an institution’s true position.
You are required to explain which qualitative characteristics of financial reporting, as per the conceptual framework, do not, in the opinion of the above quoted individuals, appear to be satisfied by current reporting practices pursuant to IFRS. Also, you are required to consider whether the views are consistent with the view that corporate financial reports satisfy the central objective of financial reporting as identified in the Conceptual Framework.
Assessment Task Part B
In 2006 the Australian Government established an inquiry into corporate social responsibilities with the aim of deciding whether the Corporations Act should be amended so as to specifically include particular social and environmental responsibilities within the Act. At the completion of the inquiry it was decided that no specific regulations would be added to the legislation, and that instead, ‘market forces’ would be relied upon to encourage companies to do the ‘right thing’ (that is, the view was expressed that if companies did not look after the environment, or did not act in a socially responsible manner, then people would not want to consume the organisations’ products, and people would not want to invest in the organisation, work for them, and so forth. Because companies were aware of such market forces they would do the ‘right thing’ even in the absence of legislation).
You are required to explain the decision of the government that no specific regulation be introduced from the perspective of:
(a)Public Interest Theory
(c)Economic Interest Group Theory of regulation
Assessment Task Part C
The US Financial Accounting Standards Board does not allow revaluation of non-current assets to fair value, but it does make it compulsory to account for the impairment costs associated with non-current assets as per FASB Statement No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets.
What implications do you think these rules have for the relevance and representational faithfulness of US corporate financial statements?
Assessment Task Part D
Many organisations elect not to measure their property, plant and equipment at fair value, but rather, prefer to use the ‘cost model’. This will provide lower total assets and lower measures, such as net asset backing per share.
You are required to answer the following questions:
(a)What might motivate directors not to revalue the property, plant and equipment?
(b)What are some of the effects the decision not to revalue might have on the firm’s financial statements?
(c)Would the decision not to revalue adversely affect the wealth of the shareholders
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2020). ACCTING7023-Understand Advanced Financial Accounting . Retrieved from https://myassignmenthelp.com/free-samples/accting7023-understand-advanced-financial-accounting.
"ACCTING7023-Understand Advanced Financial Accounting ." My Assignment Help, 2020, https://myassignmenthelp.com/free-samples/accting7023-understand-advanced-financial-accounting.
My Assignment Help (2020) ACCTING7023-Understand Advanced Financial Accounting [Online]. Available from: https://myassignmenthelp.com/free-samples/accting7023-understand-advanced-financial-accounting
[Accessed 24 October 2021].
My Assignment Help. 'ACCTING7023-Understand Advanced Financial Accounting ' (My Assignment Help, 2020) <https://myassignmenthelp.com/free-samples/accting7023-understand-advanced-financial-accounting> accessed 24 October 2021.
My Assignment Help. ACCTING7023-Understand Advanced Financial Accounting [Internet]. My Assignment Help. 2020 [cited 24 October 2021]. Available from: https://myassignmenthelp.com/free-samples/accting7023-understand-advanced-financial-accounting.
Are you spending sleepless nights, searching for the perfect argumentative essay topics for your paper? Ask experts from Myassignmenthelp.com to assist you. The hardest task in an essay is to outline and structure it properly. That is the reason why most students hire us for the perfect argumentative essay outline along with the solution. When it comes to argumentative essay topics, an outline is necessary to place your thoughts in line.
Place an order at MyAssignmnethelp.com to let us help you submit a remarkable essay even if you aren’t clear about how to write an argumentative essay.
Answer: Part A Issue: Whether Stella is considered as an employee of PRX? Rule: The main difference between employee and independent contractor is stated below: Employee entered into contract of service, but contractor entered into contract for services. Employer exercise control over the employee but no control was exercised by employer on contractor. It is considered as traditional test which was developed in Zuijs v Wirth Bros(Zuijs...Read More
Answer: Introduction: The concept of knowledge management (KM) has been augmented concerning the data management, knowledge and information within the organization along with employing for gaining competitive advantage. Knowledge Management basically encompasses the tools and process to effectively hypnotize and allocate data. In the present scenario where competition is in the rise, Knowledge Management and the connected strategies have beco...Read More
Answers: Topic- Important factor of global project management:- Module 1 From the first module I have learned about changed management is considered to be important factor of project management. I have learned about the fact that various process or strategies which are essential for managing the various changes of project. In this module various topics like project team acquisition and development, direction and management of project wor...Read More
Answers: Title: Analysis of the joint venture between Pfizer Inc. and Zhejiang Hisun pharmaceuticals 1. First off we start by analyzing the deal using Michael E. Porter’s model, the reasons for the joint venture and the involvement of the U.S. and Chinese governments in the deal. Competitive Rivalry In this segment we look at the competition in the Active Pharmaceutical Ingredients (API) manufacturing industry. Notably, in china ...Read More
Answer: Introduction In this assignment we have analysed the data on migrant labourers. Migrant labourers form a large part of the labour force. The labour force has different levels of education. They work in different businesses. There is also a difference in businesses organization. According to research done by Näre (2015) there is a significant relationship between gender and migrant workers. Similarly, according to research done by...Read More
Are you confident that you will achieve the grade?
Our best Expert will help you improve your grade