Financial Accounting Standards Board

by the system. • Tighter loan approval system is required by TRGB. • It is an expensive system. SP3: Identify factors that contribute to the problems or opportunities Answer: The points to show the factors are as given below: • Lax credit standards for loan portfolio. • Risky loan approval leads to interest income for…

According to AU-C 200 & AU-C230, GASS requires that the auditor should obtain a reasonable assurance “Not absolute assurance” about whether the financial statements are free from material misstatement. To reach that the auditor needs to collect evidences that have reasonable quantity and quality “sufficient appropriate audit evidence”. In AU-C 230, the objective of the auditor is to plan and perform the audit work in order to obtain sufficient appropriate audit evidence to reduce the audit risk.…

3. Recognize the transaction price. The transaction price mostly refers to the amount of consideration that an entity expects to receive from the customers or contract. It includes the estimate of consideration with the following variables, such as rebates and bonus, that by using a “probability-weighted” measure on the expected transaction price, the amount can be identified. It is affected by the time-value of money and non-cash consideration in order measure the fair amount of the…

Report and Financial Statements 2014 in this week’s learning journal since it is the company I chose in my week 1. Before I delve into discussing whether I think they use accrual-based account or cash-based accounting I will like to define the terms. Accrual basis accounting simply means the process of recording revenue and expenses as they take place even though there has not been an exchange of cash, while, cash basis accounting as the name typifies is the opposite of accrual basis accounting.…

is when there are multiple items included in a contract, some of which are goods, some are services, and others are rights to goods or services. ASC 606 strives to clarify how contracts should be classified in order to improve the accuracy of financial statements. An example given on FASB/IASB Joint Transition Resource Group for Revenue Recognition…

Reporting Intangible Assets Accurate financial reporting of an organization is very important in today’s modern business world. Intangible assets play a critical role in the valuation of an entity as they may bring significant value to the table. An intangible asset is an identifiable nonfinancial asset which lacks physical properties according to both the international community as well as the standards set by the United States. Intangible assets include items such as such as trademarks,…

consider why Accounting Conceptual frameworks have been devised; what are the main principles to be considered when drawing up any accounting statements and who uses them. I will also consider what different financial statements can be produced and what the key elements are in these statements. Finally I will discuss some issues arising from the use of accounting conceptual frameworks. Accounting Concepts and Principles are conventions that give a structure for financial reporting. Financial…

Define financial accounting and managerial accounting. What are the characteristics of financial accounting and managerial accounting? Financial Accounting is define as the art of recording, categorizing, summarizing and reporting a business transaction in a trivial fashion and in regards to money, the summary of this transactions are in the preparation of financial statement, which includes, income statement, balance sheets and cash flow statement, that sum up and interpret the operations…

STATEMENT OF THE PROBLEM After a thorough reading and understanding of the case of Biovail Corporation: Revenue Recognition an FOB Sales Accounting, first issue or problem that arise is regarding the policy of the accounting for revenue recognition. Since the stock of Biovail was listed on the New York Stock Exchange, they are complied with the U.S GAAP which mentioned that revenue must be earned and realized or realizable for it to be recognized. Under SAB 101, there are four criteria which…

leaders and potential investors to clearly illustrate the financial health of an organization. It is important to fully understand the information provided within the income statement to accurately ascertain the information provided. A mistake made in the creation of an income statement can have massive consequences. Business leaders must clearly understand policies regarding revenue and expenses in order to correctly assess the financial stability of an organization using its income…