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¶ … Alleg Balance Sheet
Current assets: This presentation is a simple step income statement due to the fact that all data is combined on one sheet.
Cash
$13,000
Market Securities
$17,000
Account receivable
$26,000
Inventories
$30,000
Total Current assets
$86,000
Plan and equipment:
Land and buildings
$57,000
Machinery
$125,000
$182,000
Less Accumulated depreciation
Total Plant Equipment
$61,000
$121,000
Intangibles:
Goodwill
$8,000
Patents
$10,000
$18,000
Other Assets
$50,000
Total Assets
$275,000
LIABILTIES AND STOCKHOLDERS EQUITY
Current liabilities
Accounts payable
$15,000
Current maturities of long-term debt
$11,000
Total Current Liabilities
$26,000
Long-Term Liabilities
Mortgages payable
$80,000
Bonds payable
$70,000
Deferred Income Taxes
$18,000
Total long-term liabilities
$168,000
Stockholders' equity:
common stock no par value
21000 shares authorized at $1 par valu,
10000 shares issues
$10,000
Additional paid in capital
$38,000
Retained Earnings
$33,000
Total Stockholder's equity
$81,000
Total Liabilities and Stockholders equity
$275,000
Case 3-8
a. Special Note
1. This was prepared using the Financial Reporting Standards or IFRS.
2. This was not reconciled with the U.S. Or the U.S. GAAP.
3. The statements comply with HKFRS and the standards are not identical.
b. Audit Report
1. Two years of 2007 and 2008.
2. IFRS standards were used.
3. The internal group maintained effective control.
4. Ultimately the responsibility falls on the Group's leadership branch to maintain legal and fair reporting standards.
5. The auditing standards used were applicable in this case.
6. Internal controls are merely tools of greater strategic objectives, their success is dependent upon their purpose and application.
c. Consolidated Balance Sheet
1. It is necessary to create some shared ideas of standards and the report was being presented to the SEC which uses different standards.
2. The assets presentation is a standard IFRS presentation with an emphasis on non-current assets.
3. The equity portion is presented before the liabilities section making it similar to the IFRS.
4. Liabilities are presented in succinct and appropriate format.
Problem 4-4
Taperline Corporation Income Statement
For Year ending Dec 31, 2010.
Revenues
Sales
$670,000
Rental Income
$3,600
Gain on the sale of fixed assets
$3,000
Total revenues
b. Yes
c. If a subsidiary were not consolidated but accounted for using the equity method, this would increase the net earnings due to the profitability of the subsidiaries.
d. Equity in loss from unconsolidated entities is the amount of loss based on the net losses of the unconsolidated affiliate.
e. Note 1 suggests that due to write offs there should be a better after tax profitability component.
f. Taking impairment for goodwill under financial services is not a good idea because this should be reserved for writing off worthless goodwill. Unless there are financial services that are worthless this is not advised.
Essay
The purpose of this essay is to explore the accounting standards that are practiced within the United States. Specifically this writing will address the issue of where the U.S. stands in relation to the International Financial Reporting Standards (IFRS) in today's economic climate. This essay will also address the Generally Accepted Accounting Principles (GAAP) and how it compares to the IFRS standards. Before concluding, a comparison will be offered that highlights the advantages and disadvantages of companies operating in the U.S. To adhering to IFRS standards.
The U.S. Relation with the IFRS
Economic and financial principles are difficult to standardize and even more difficult to properly understand within the context of complex and entangling financial regulations. The International Financial Reporting Standards (IFRS) is a global attempt at regulating the accounting profession and providing some sort of guidance for business practices to model in order to create a universal code or language to conduct commerce.
The United States, a very powerful and independent nation in many ways, has held out from complying with the IFRS standards for many years despite pressure from other countries and organizations. The current trend is seen as not likely that the U.S. will adopt these standards. Bramwell (2014) explained "the prospect of International Financial Reporting Standards (IFRS) being fully adopted in the United States in the near future are growing less likely, as the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB)…
References
Bramwell, J. (2014). Fitch: IFRS Adoption in the U.S. Unlikely. Accountweb, 9 July 2014. Viewed 6 July 2015. Retrieved from http://www.accountingweb.com/technology/accounting-software/fitch-ifrs-adoption-in- the-us-unlikely
Hillman, A.D., Heaston, P.H., & Dodd, J.L. (2012). Convergence or Adoption of IFRS in the United States?. Drake Management Review, 1(2), 5-8.
Kaya, D., & Pillhofer, J.A. (2013). Potential adoption of IFRS by the United States: A critical view. Accounting Horizons, 27(2), 271-299.
Street, D.L. (2012). IFRS in the United States: If, when and how. Australian Accounting Review, 22(3), 257-274.
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