Note: Sample below may appear distorted but all corresponding word document files contain proper formattingExcerpt from Essay:
Fictional Accounting Report
Significant Accounting Policies
The valuation of inventory is done in a specific way. The cost of the item is calculated and the net realizable value is calculated. The lower of those two values is always the value quoted in our accounting reports. If/when the factory is idled or otherwise not usable during a particular accounting period, those instances are measured on dollar amounts and then expensed as such. In terms of the valuation of products as noted above, the direct labor as well as the fixed/variable production overhead amounts are all properly calculated and included in the cost of making the goods. Overhead is applied proportionately based on the value of the goods in question and the number of a given product made rather than being otherwise allocated or shared.
Property, Plant, & Equipment
The value of property owned by the company, plants owned by the company and equipment owned by the company is done in much the same way and is done consistent with the manners and methods used by most companies. Of course, all goods are purchased for a certain value and then the value of the good depreciates over time. The value of the goods used in our reports, as consistent with the above, is the amount of the money spent on the property, plant or equipment when originally bought minus accumulated depreciation that has amassed on that item.
Contingencies and Liabilities
Contingent liabilities are also done on best-guess estimates based on what could or probably will happen using proper valuation techniques that clearly establish the value of the event if/when it happens. Liabilities are based on the true cost to the company based on interest rates and other fees of borrowing as they are known and verifiable at the time that the reports are issued.
Changes in Accounting Principles or Estimates
Except in the event where it is explicitly required and called for per the verbiage and interpretation of the law based on the guidance from the relevant agencies themselves, all changes to accounting policies are done in a retrospective manner.
Post-Balance Sheet Events
As defined by the commonly held standards in the accounting field, any event that is significant in nature from an accounting standpoint and that happens between December 31st and January 26th will be dealt with and accounted for using the proper adjustmetns, accrual changes and so forth so that the accounting reports reflect the event or change. An example would be a law that changes retroactively on January 15th and it affects the period ending on December 31st.
Mergers & Acquisitions
In the event that a company is acquired or merged with the company for which this report is for, then any number of facts and figures relevant to the type of potential or actual situation will be addressed. This would include the valuation of the company to be acquired or merged with and this would include both the company for whichi this report is issued as well as the external companies that are involved. Also important to note is that the method in which the companies in question are valued will also be explained. Quite often, the price paid for an acquisition of stock or property may be at a premium (or a discount) depending on the status of the company. A company that is falling fast would tend to get less money than they are probably actually worth and the opposite would be true for a company with very good and strong projections in the near future. The budget of the acquiring company as well as the opinions and demands of the shareholders or the company owners are all factors. The extra money paid will be manifested in the form of goodwill. If a discounted price is agreed to and executed by all of the proper parties, that will also be noted.
For leases under which the firm is highly invested or interested in from an accounting standpoint will be strongly and fully detailed in the accounting reports issued for the firm. Any lease in which the firm bears most of the risk, operations and/or liability will be referred to as operating leases. Lease payments for operating leases will be accounted for and recognized on a "straight line" basis. Any incentives or discounts received by the lessor will be included in the calculations. Additionally, if a lease leads to the firm bearing the burden of both the risk and any reward as a result of the lease, it will be referred to as a "finance lease." These leases are capitalized from their inception until their ending and fair values and prevailing interest rates as well as the lease payments themselves will all be part of the calculus from a reporting standpoint. When the aforementioned property/plant/equipment items are leased items, the lesser of the lease term and the item's useful life will be the basis for the depreciation that is calculated for the items.
Earnings per Share (EPS)
The firm behind this report presents earnings per share, commonly shortened to EPS, in both basic and diluted forms, as appropriate and applicable. As is consistent with normal accounting standards, basic earnings per share is simply the net income that can be applied to shares of stock divided by the number of shares, thus showing a net average per share. The diluted shares amount is roughly the same but takes into account the shares that are held by the company. The income statement will reflect all of these amounts, parsed out by type. Any convertible personnel debentures, restricted share amount and share options granted to employees will also be listed and account for based on commonly accepted American and international accounting standards.
Given the fairly varied and different ways in which long-term debt is accounted for, the firm has taken a more balanced and honest approach than many in this regard. The real and actual amounts of finance fees, transaction costs and discounts will all be clearly listed but easy to read so as to not inundate readers of our reports with information while at the same time not obfuscating what is really going on. However, in the event that the proposed presentation of a report will not make the information clear, things will be summarized as succinctly as possible for a quick read and then shown in more detail further down in the report. Another action item that is specifically mentioned is debt that can be "called," which is when a debt owner can demand full payment right then and there, typically. Obviously, such arrangements are avoided and are usually the product of the firm borrowing the money breaching the pay-back agreement. As such, this is something that the firm will rarely have to deal with in reality.
Employee Pension Obligations
The reporting of employee pension obligations, as far as the firm and most other firms is concerned, falls under the broader subject of employee benefit accounting. The overall amounts contributed to the pension are accounted for on the statement of income for all relevant periods in which the contributions are made. One thing that is specifically notated and explained in each report and its figures is the vesting status of the monies for the employees as the vesting is not automatic and happens in stages. Amounts that are vested and non-vested are accounted for accordingly based on the status as of the end of the accounting month, quarter or year in question.
There are several different popular standards as it relates to the use of estimates. Perhaps the most popular, and the one used by the firm, is the International Financial Reporting Standards (IFRS) directive. As such, the firm will judge, estimate and assume values and estimates based on the totality of…[continue]
"Fictional Accounting Report" (2014, June 09) Retrieved October 22, 2016, from http://www.paperdue.com/essay/fictional-accounting-report-189783
"Fictional Accounting Report" 09 June 2014. Web.22 October. 2016. <http://www.paperdue.com/essay/fictional-accounting-report-189783>
"Fictional Accounting Report", 09 June 2014, Accessed.22 October. 2016, http://www.paperdue.com/essay/fictional-accounting-report-189783
Accounting Snags' stock price has been cut in half the past few years. Investors are concerned that almost every reliable measure of the company's financial health has declined in that period. The worst area is with profitability, as the company's margins have declined sharply at all levels. If current trends in profitability persist, Snags will lose money in FY2013. Along with the decline in profitability and therefore investment returns, other ratios
Australian Accounting The complicated world of finance, business and accounting in today's world justifies the firm's customer base's inquiry into some proposed changes in accounting standards for leases. The purpose of this report is to inform clients on current and proposed accounting standards that are affecting their means to do business. This report will first give a brief history of these standards before describing the current practices that are used by
28) This quotation shows how arbitrary MTM can be. Simply by terming Enron's cash shortage a sa minority interest as opposed to the proper term for it, debt, Enron was able to manipulate MTM to prevent such a sizeable loss from appearing on its balance sheet. Moreover, MTM's role in this transaction allowed Enron to repair its problem of a cash flow shortage since it credited $500 million via its
Sarabanes-Oxley Act Standard to most businesses is the idea that it is management's only responsibility in an organization to generate profits -- the best possible fiscal return for stakeholders. This template argues that the fiscal responsibility of the business is paramount, but that managers may not be the right level to handle a morally suspect global project. Additionally, focusing too farm on moral issues and too little on profit (Savage and
With them saying in their first quarter 2008 earnings report that they had: a liquidity pool of $34 billion, unencumbered assets of $64 billion and $99 billion in regulated assets. At the same time they affirmed the Moody's credit rating of A1, on the basis of the company's capital basis and liquidity. (Kuhlengisa, 2008) This is problematic, because when looking at this statement and considering what would happen a
The cost driver for Underwriting costs are "review hours' in the form of labor costs and the cost driver for Technology cost is 'IT hours'" (Kren 2008). In the scenario, some costs involve committed resources that cannot be easily adjusted while others do not. ABM provides guidance as to how to adjust the flexible aspects of the enterprise. For example, the average cost per hour for the Underwriting input
Rolls Royce The principle activities of Rolls Royce are to provide "integrated power solutions for customers in civil and defense aerospace, marine and energy markets." The breakdown is as following: The auditor's report conveys the following findings. "The financial statements give a true and fair view of the state of the company's affairs" The financial statements have been properly prepared in accordance with IFRS and UK GAAP The director's remuneration report has been properly prepared