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.....mission of the Emerging Issues Task Force (EITF) exerts upon the Financial Accounting Standards Board (FASB)The Emerging Issues Task Force (EITF) was established with the main purpose of addressing and coming up with resolve for current issues being faced by professionals in the accounting field, which were not addressed by announcements of the Financial Accounting Standards Board (FASB). Prior to the establishment of ETIF in 1984, the FASB constantly faced challenges of not being able to offer well-timed and sensible solutions to developing practice problems. The EITF was therefore designed to disseminate and propagate carrying out guidance within the structure of the Accounting Standards Codification to decrease multiplicity when it comes down to it on a well-timed basis. In their field of profession, accountants experience a wide range of issues that are not comprehensively addressed in accounting pronouncements, and, which necessitate prompt resolve. In addition, such professionals insist that incessantly increasing body of professional statements has generated an issue of an overwork of standards. The most significant impact that the mission of the EITF applies on the FASB is to reduce the necessity for the FASB to devote time and determination addressing constricted execution, solicitation, or other developing issues that can be investigated within prevailing Generally Accepted Accounting Principles (GAAP) (FASB, n.d).
Analyze the EITF's effectiveness with finding resolutions to emerging accounting issues, and make at least two (2) recommendations as to how they could improve their effectiveness. Justify your recommendations
The EITF has to come to unanimity on a prospective solution to an issue through a voting system whereby 13 members out of the total 15 task force members have to come to an agreement prior to the publication of the solution. The Emerging Issues Task Force is quite efficacious in having swift and prompt responses to accounting issues and resolving them in comparison to the FASB. Moreover, the task force's effectiveness can be perceived in the sense that the members respond to issues in a way that is less commanding and imposing. Nonetheless, there are areas that necessitate improvement by the EITF (Herz, 2015). One of these key areas is taking less number of meetings to come up with resolutions for emerging accounting issues that arise. In particular, it should not take the EITF an excess of three meetings to address and resolves such issues. Another area...
The prevailing process being used is interesting and distinctive to some extent. As pointed above, reaching an ultimate consensus necessitates that no more than three members of the task force object. Despite the fact that his method was purposed to promote reaching of a consensus, offer prompt direction and to diminish diversity in practice, it can also generate some odd outcomes. This approach brings about the least objectionable accounting instead of better accounting. A recommendation would be to necessitate a majority positive voting result (Herz, 2015).
Research the issue you selected from the EITF's "Description and Status of Current Issues" page, and analyze at least two (2) key areas being addressed by the EITF
There are different issues addressed by the EITF. One of the key issues is EITF Issue Number 15-F Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. One issue discussed is the distributions received from equity method investments. The main direction offered by the task force provides an accounting policy selection for the classification of distributions received from equity method investments. These amounts can be classified using two different approaches, which include the nature of distribution approach and the cumulative earnings approach (FASB, 2016).
With respect to the cumulative earnings method, from the outset, a comparison of the distributions received would be made by the investor in relation to the cumulative equity approach earnings. The distributions received up until they satisfy the cumulative equity earnings amount, would be deemed a profit or yield on investment and therefore categorized in operating activities. Any surplus distributions received would be deemed a profit of investment and categorized in investing activities. On the other hand, there is the classification of distributions on the basis of the nature of activities undertaken by the investee that give rise to the distribution. If the vital data and information is inaccessible in order to ascertain the nature of activities, then the cumulative earnings method ought to be employed. However, this change has to be indicated and reported on the financial books (Althoff and McKeever, 2016).
A second issue is contingent consideration payments that are made subsequent to a business combination. Guidance given is that cash payments that are made three months or less subsequent to consummation date of the…
Accounting The Affordable Care Act (a.ka. Obamacare) has created some interesting implications for financial reporting. The issues revolve around the determination of benefits, particularly when companies opt to put their employees through Obamacare insurance exchanges where they had previously been on a company plan. The Affordable Care Act was signed into law in 2010, and reshaped the health care insurance industry in particular. With the creation of health care insurance exchanges,
However, they have also changed the face of the accounting profession in a way that will affect the education and conduct of accountants in the future. In the future, the accountant will have to do more than to balance the books. In order to understand the potential educational requirements for accountants in the future, we will examine how they have changed historically and then apply the changes that have
Accounting standards and IFRS adoption in Cambodia and Thailand The significance of accounting standards Accounting may be considered as a business language through which the statistical results can be acquired which help in analyzing how well the firm is functioning. They give out timely statements of these statistics and help the stakeholders get all the information they need. Accounting is like a separate language which has its own grammar and these outlines
production/income and so on. Some companies also include quality assessments as part of their analysis of department efficiencies. 5.Explain the role of the budget in the business control cycle. Budgets can be used to help a firm meet goals and objectives. The business control cycle consists of four steps. The first is setting the standard, that is, creating the budget. The next is recording the performance of the company's departments. Third,
International accounting - Evaluate research theories and methodologies to classify accounting systems internationally The necessity of accounting standards is given by the fact that financial statements should describe financial performance in a fair and consistent manner. Lacking standards, users of financial statements would be required to master the accounting rules of each company, and any comparison between companies' performances would be almost impossible. Accounting standards are essential to the healthy development of
Experimental Research Methods in Business Experimental Research Methods The author provides a survey of the literature illustrating applied experimental research methods in cross-sections of business and organization types. The advantages and disadvantages of the experimental research methods are discussed for each of the examples provided which run the gamut from depression-era agricultural economics to research conducted for the National Science Institute. While the article focuses on business research methods, the range of