country
$20 Bonus + 25% OFF
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

HA 3011 Advanced Financial Accounting For Qualitative Characteristics

tag 0 Download9 Pages / 2,060 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT
  • Course Code: HA 3011
  • University: University Of The West Of England
  • Country: United Kingdom

Questions:

1. 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. 

2. You are required to explain the decision of the government that no specific regulation be introduced from the perspective of:

(a)Public Interest Theory
(b)Capture Theory
(c)Economic Interest Group Theory of regulation

3. What implications do you think these rules have for the relevance and representational faithfulness of US corporate financial statements?

4 Required

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?


 

Answer:

1. Financial statements of the organizations must contain the qualitative characteristics in order to become useful to the users. Two types of qualitative characteristics are there; they are Fundamental qualitative characteristics and enhancing qualitative characteristics. The characteristics of fundamental qualitative are Relevance and Faithful Representation. The enhancing qualitative characteristics are Comparability, Verifiability, Timeliness and Understandability. The provided article contains the viewpoint of different individuals on the adoption of International Financial Reporting Standard (IFRS) and there is an indication of the absence of one of the qualitative characteristics of financial reporting in every viewpoint.

The former AXA head of finance, Geoff Roberts, mentions about the large reliance of investors on the investor’s report published by the companies and management brief in order to gain understanding about the financial sanding of the entities. This aspect indicates towards ‘understandability’ that is an enhancing qualitative characteristic and it assists to enhance the quality of financial reporting. The presence of this characteristic helps the users of financial information in clarifying, characterizing and presenting the financial statements for gaining better understanding of the financial standing of the companies. Due to the adoption of IFRS, complexities can be seen in understanding the essence of financial statements. As per the opinion of Geoff Roberts, the adoption of IFRS has been showing less effectiveness for the investors in gaining understanding about the financial position with the help of inventor’s report and management briefing.

As per Wesfarmers finance director, Terry Bowen, the financial analysts would end up in misinterpreting financial information if they want to explain the notes of the financial statements as per IFRS. This viewpoint indicates towards the absence of comparability and understandability characteristics. Users become able in identifying the similarities and differences of financial information with the help of comparability characteristic. It indicates towards the fact that in the absence of effective technical knowledge, the uses will not be able in understanding and comparing the financial information with the help of financial notes.  Thus, in order to understand the IFRS adopted financial statements, users need to be technically qualified.

According to Commonwealth Bank chief financial officer David Craig, the investors have stopped relying on the financial information of IDRS adopted financial statements due to their failure in conveying the true financial standing of the entities. It indicates towards the absence of ‘faithful representation’ characteristic. The lack of this characteristic indicates towards the failure of IFRS to provide complete description about all financial items of the business entities. Apart from this, the failure of IFRS can be seen to provide the numerical description of the economic resources. In the presence of all these aspects, it becomes easy to do fraud in financial reporting.

It is the objective of general purpose financial reporting to deliver all the required information to the users so that they become able in ascertaining the true financial standing of the entities. However, it is not possible to satisfy the main objective of general purpose financial reporting in the absence of the above-discussed major qualitative characteristics.

2. The following discussion involves in analyzing and evaluating the decision of the government to add no specific regulation with the help of three theories; they are Public Interest Theory, Capture Theory and Economic Interest Group Theory of Regulation.


 

Public Interest Theory

The main rule of public interest theory states that the market regulators always try in finding the solution for any specific problem that is related to the economy. According to this theory, people give impedance to the regulations to for finding solution to any problem. Thus, the above discussion shows the aim of this theory that is the betterment of the public with the help of different regulations. By applying this theory to this context, it can be said that the government was required to establish regulations in the Corporations Act in order to include social and environmental responsibilities. It also indicates that the market forces may not always be working to implement environmental and social responsibilities. Thus, in the presence of specific regulations, the obligation will be on the firms and the customers to fulfill their social and environmental responsibilities in the effective way. Hence, based on the above discussion, it can be said that it is required for the government to introduce specific regulations under the Corporations Act.

 

Capture Theory

Regulations are implemented for the betterment of the common people of society. However, from the viewpoints of capture theory, the regulators do manipulation with the regulations in order to keep their own interest. Specifically, after certain period of time, the regulations work for the benefit of the regulators. Thus, by applying capture theory, it is possible to know the main mote for the implementation of a specific regulation. In addition, the application of theory helps in identifying the people who will be affected with the implementation of specific regulations. Thus, the application of this theory in this context shows towards the correctness of the government’s decision not to introduce any regulation for the promotion of social and environmental responsibilities. As per this theory, the implementation of any regulation will create scope for the regulators to satisfy their own interest by manipulating the regulations after certain point of time. Thus, the market forces should be allowed to work for the elimination of the scope of capturing the regulation under this theory.    

Economic Interest Group Theory of Regulation

Difference can be seen in this theory when compared to the above two theories. As per this theory, various policies can be seen in the regulations that are affected by the forces of demand and supply. This particular theory puts the government at the side of supply and puts the interest group at the side of demand. According to this theory, the main objective to develop the regulations is to make the industries beneficial. It shows the development of regulations by the industries and make the market to adopt them. Thus, after applying this theory to this context, it can be said that it was needed for the government to introduce regulation in the corporation act for the betterment of common people as consumers are considered as the major stakeholders for the businesses. Thus, it is required for the government for the inclusion of consumes in the regulation development process as it will contribute towards the development of suitable regulations for both the consumers and the industry. In this way, it will be possible for the government to maintain a balance between the consumers and the industry.

3. The provided situation indicates towards the absence of any specific regulation for the purpose of the revaluation of non-current assets at fair value under US Financial Accounting Standard Board (FASB). However, it is the obligation on the companies to take into consideration the impairment cost of non-current assets under FASB Statement no. 144 Accounting for the Impairment or Disposal of Long-Lived Assets. This particular regulation has specific implication for the relevance and faithful representation of financial statements of the US business entities as these changes have major part to play in bringing improvement in the financial reporting of the companies. This change in regulation helps to develop a single accounting model for the accounting treatment of sale or disposal of long-lived assets. These types of assets can be newly acquired, or can be previously held. The introduction of this standard assists to broad the presentation of discontinued operation in order to include more sale or disposal related transition. Due to this reason, differences will not be there for the accounting transactions of similar circumstances or events. Most importantly, it will help to bring improvement in the process of financial reporting.

Moreover, this change will play a major positive part to provide solution to various kinds of issues related to implementation that will lead towards bringing improvements to comply with the accounting principles and standards. In addition, it will assist in the promotion of faithful representation and comparability of the financial information. In this context, it needs to be mentioned that the implementation of this standard will eradicate the consistency for having two models for the accounting of the disposal of the long-lived assets. Thus, there are major benefits of having these rules. This aspect will bring major positive change in the accounting information that will make the users of the financial statements to understand the major similarities and differences between two types of economic events of the disposal of long-lived assets in the companies. Hence, from the above discussion, one aspect is clear that this change in rule has major positive impact on the process of financial reporting. More specifically, the above mentioned regulation of FASB assist in bringing overall improvement in the aspect of financial reporting of the business entities of US by bringing improvement in the accounting treatment of long lived financial assets of the business entities.

4. a) The presence of major reasons can be seen that provides the directors with the motivation for asset revaluation. These reasons are listed below:

  1. The asset revaluation process assists in to depict the true rate of return on capital employed so that the directors can develop effective strategies for bringing improvements in the organizations.
  2. The asset revaluation process assists the directors of the business entities to obtain knowledge about the fair value of the assets that the companies have appreciated from the time of the purchase.
  3. The process of asset revaluation gives the directors with the opportunity to negotiate the fair value of the assets while merger and acquisition.
  4. The asset revaluation process of the companies gives the directors the necessary view to the total value of the resources of the business organization.
 


b) In case there is not any process of the revaluation of assets, there will not be any decrease or increase of the book value of the assets of the companies. This aspect will lead to the generation of abnormal loss or profit while disposing the assets in the fair market price. In addition to this, there will be fall in the percentage of the earnings of the business entities in case there is not any process of asset revaluation in the companies. Most importantly, the absence of the process of asset revaluation will lead to the fall in the total amount of the assets after certain time that will  affect the financial position of the companies.

 


c) Adverse effect of the decision of not revaluation of the assets can be seen on the wealth of the shareholders of the companies. As per the above discussion, there will be decrease in the earning of the companies due to not revaluation of the assets. Thus, there will be decrease in the rate of return from investment of the shareholders as a result of the decrease in company earnings. For this reason, the shareholders will not be able to gain their expected return from their investment.

 

References

Cavestany, R, B Boultwood, & L Escudero, Operational risk capital models. in , London, Risk Books, 2015.

Ford, J, Regulating business for peace. in .

Illustrative IFRS consolidated financial statements for 2012 year ends. in , Haywards Heath, Bloomsbury Professional, 2012.

International financial reporting standards. in , London, International Accounting Standards Board, 2012.

Kieso, D, J Weygandt, & T Warfield, Intermediate accounting. in , Hoboken, N.J., Wiley, 2012.

Kolitz, D, & C Sowden-Service, GAAP. in , [Durban, South Africa], LexisNexis, 2013.

Kolitz, D, & C Sowden-Service, GAAP. in , [Durban], LexisNexis, 2012.

Lehman, C, Accounting in Conflict. in , Bingley, Emerald Group Publishing Limited, 2016.

L'Etang, J, D McKie, N Snow, & J Xifra Heras, The Routledge handbook of critical public relations. in .

Li, M, Q Zhang, J Zhang, & Y Li, Proceedings of 2015 2nd international conference on Industrial Economics System and Industrial Security Engineering. in .

Mackenzie, B, D Coetsee, T Njikizana, E Selbst, R Chamboko, & B Colyvas et al., Wiley IFRS 2013. in .

Manual of accounting. in , Haywards Heath, Bloomsbury Professional, 2012.

Media, B, ACCA P4 - Advanced Financial Management - Study Text 2013. in , London, BPP Learning Media, 2012.

O'Sullivan, P, M Esposito, & N Allington, The philosophy, politics and economics of finance in the 21st century. in , Abingdon, Oxon, Routledge, 2015.

Steenkamp, N, & C Deegan, ACCT19062. in , North Ryde, N.S.W., McGraw-Hill Australia, 2013.

Yoxen., Frequently Asked Questions on IFRS. in , New York, John Wiley & Sons, 2013.

Download Sample

Get 100% money back after download, simply upload your unique content* of similar no. of pages or more. We verify your content and once successfully verified 100% value credited to your wallet within 7 days.

Upload Unique Document

Document Under Evaluation

Get Credits into Your Wallet

*The content must not be available online or in our existing Database to qualify as unique.

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2020). Advanced Financial Accounting For Qualitative Characteristics. Retrieved from https://myassignmenthelp.com/free-samples/ha-3011-advanced-financial-accounting-for-qualitative-characteristics.

"Advanced Financial Accounting For Qualitative Characteristics." My Assignment Help, 2020, https://myassignmenthelp.com/free-samples/ha-3011-advanced-financial-accounting-for-qualitative-characteristics.

My Assignment Help (2020) Advanced Financial Accounting For Qualitative Characteristics [Online]. Available from: https://myassignmenthelp.com/free-samples/ha-3011-advanced-financial-accounting-for-qualitative-characteristics
[Accessed 05 August 2020].

My Assignment Help. 'Advanced Financial Accounting For Qualitative Characteristics' (My Assignment Help, 2020) <https://myassignmenthelp.com/free-samples/ha-3011-advanced-financial-accounting-for-qualitative-characteristics> accessed 05 August 2020.

My Assignment Help. Advanced Financial Accounting For Qualitative Characteristics [Internet]. My Assignment Help. 2020 [cited 05 August 2020]. Available from: https://myassignmenthelp.com/free-samples/ha-3011-advanced-financial-accounting-for-qualitative-characteristics.


Citation of the sources of information used in the paper is undoubtedly an essential step in academic writing. And if your dissertation or research paper is poorly cited or lacks accurate information in the bibliography, you may lose some crucial marks for it. MyAssignmenthelp.com offers thorough assistance on the citation part with its hassle-free online citation generator tool. This versatile citation maker tool can product accurate citation of various sources as you input the necessary details in it. It can be used as an MLA citation machine, APA citation machine, Harvard citation generator, or Chicago citation maker. The tool allows you to generate citation on almost every dominant citation style you can think of.

Latest Management Samples

BUSM4411 Project Initiation Management

Download : 0 | Pages : 13
  • Course Code: BUSM4411
  • University: Royal Melbourne Institute Of Technology
  • Country: Australia

Answer: As stated by Chen (2015), different kinds of projects had become an integral part of the contemporary business landscape and it is seen that the diverse corporations are increasingly taking up various projects for the enhancement of their profitability. Harris et al. (2018) are of the viewpoint that the framework of projects becomes more important in the particular context of the construction, energy and other sectors rather than the b...

Read More arrow Tags: Australia 9 Project intiation Management Other 

LCBS5042 A Study On Cross Culture Business For Technological Infrastructure

Download : 0 | Pages : 21
  • Course Code: LCBS5042
  • University: De Montfort University
  • Country: United Kingdom

Answer: Introduction Due to globalization the international borders have opened up for business opportunities. Because of this there has been a growth in the academic research in this field. Business organisations have realised their scope and potential in the international market, however there are also several problems and challenges that are faced by the managements in order to manage and understand the dynamics of people who are from a co...

Read More arrow

HSYP807 Innovation In Leadership Teamwork And Advocacy

Download : 0 | Pages : 5
  • Course Code: HSYP807
  • University: Macquarie University
  • Country: Australia

Answer: Introduction The main purpose of this report is to analyze the financial statement of HSC trading Group ltd which operates in UK. The financial statements will be including periodic trial balance, statement of profit and loss account and Balance sheet of the company. A periodic trial balance is prepared to check whether the total of debit and credit side of the trial balance matches or not. It is prepared for general mathematical accu...

Read More arrow

ACC203 Management Accounting For Improvement In Budgeting Process

Download : 0 | Pages : 3
  • Course Code: ACC203
  • University: Polytechnic Institute Australia
  • Country: Australia

Answer: Answer to part 2: Memorandum: To: CEO of Exhibition Furniture From: ABC Consultancy Firm Date: 12th February 2018 Subject: Improvement in Budgeting Process To improve the budgetary process a constant improvement can be introduced to execute the budgetary procedure. The direct material consumption can be improved primarily in two areas namely the value and use. References can be made in improving the usage of direct materials...

Read More arrow

5BUS1157 Corporate Finance For The Efficiency Market Hypothesis

Download : 0 | Pages : 7
  • Course Code: 5BUS1157
  • University: University Of Hertfordshire
  • Country: United Kingdom

Answer: Introduction: Warren Buffet does not believe in efficient market hypothesis. He is one of the greatest investors in current scenario. Warren Buffet believes that the share price of a particular company could be controlled by the inventors by selling bulk shares or buying bulk shares at any time. Due to the information and insider knowledge about the security market, Warren Buffet managed to outperform in the market and the companies o...

Read More arrow
Next
watch

Save Time & improve Grade

Just share Requriment and get customize Solution.

question
We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits

1,377,905

Orders

4.9/5

Overall Rating

5,085

Experts

Our Amazing Features

delivery

On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.

work

Plagiarism Free Work

Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.

time

24 X 7 Live Help

Feel free to contact our assignment writing services any time via phone, email or live chat.

subject

Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.

price

Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 5/5

2109 Order Completed

99% Response Time

Emma Zhong

Ph.D in Project Management with Specialization in Project Communications Management

Singapore, Singapore

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

2830 Order Completed

97% Response Time

Leroy Bicknell

MBA in Marketing

London, United Kingdom

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

2115 Order Completed

97% Response Time

Kimberley Chen

MPA in Accounting

Singapore, Singapore

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

184 Order Completed

96% Response Time

Arapera Billing

Masters in Management, MMgt

Wellington, New Zealand

Hire Me

FREE Tools

plagiarism

Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.

essay

Essay Typer

Get different kinds of essays typed in minutes with clicks.

edit

GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.

referencing

Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.

calculator

Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability

1

1

1

Your Approx Earning

Live Review

Our Mission Client Satisfaction

Awesome work. Awesome response time. Very thorough & clear. Love the results I get with MAH!

flag

User Id: 383727 - 31 Jul 2020

Australia

student rating student rating student rating student rating student rating

Work was done in a timely manner took it through grammarly checked for plagiarism very well satisfied

flag

User Id: 463334 - 31 Jul 2020

Australia

student rating student rating student rating student rating student rating

Great work for the short notice given. Thank you for never disappointing and helping out.

flag

User Id: 194216 - 31 Jul 2020

Australia

student rating student rating student rating student rating student rating

I received a full point on the assignment. Thank you for all the help with the assignment.

flag

User Id: 411395 - 31 Jul 2020

Australia

student rating student rating student rating student rating student rating
callback request mobile
Have any Query?