This website uses cookies to ensure you have the best experience. Learn more

Asset Measurement, And Accounting Policies And Standards

1073 words - 4 pages

If we look at a reporting entity's balance sheet we will see a total given for all the entity's assets (this is a requirement of AASB101). This aggregate total is derived by adding together the various classes of current and non-current assets. Do you think it is appropriate that the various classes of assets are simply added together, even though they have probably been measured on a number of quite different measurements bases?INTRODUCTIONAASB requires the reporting entities to include balance sheet in their annual report. The objective of balance sheet is to provide information for internal and external users. Internal users like managers, owners can use the information in the balance sheet to know about their financial position at the current time and to evaluate how they can go forward in the future. Internal users are interested to know the total net assets the entity has at the current time.External users like creditors, suppliers etc are willing to know how much the total value of the net assets is at the moment. They want to know the size of the business, whether it is reliable or not, whether the investment in the entity would be profitable or not.Therefore relevance and reliability are must considerations when preparing a balance sheet.According to ACT department of Treasury, when a balance sheet is presented, it should contain subtotal for all the assets, liabilities and other particulars. (Retrieved on April 14, 2009 from the ACT Department of Treasuryhttp://www.treasury.act.gov.au/). This is to make sure that value of total current assets and total non-current assets can be observed very easily. This is in alignment with the pro regulation perspective where free-riders get have the access to financial information of reporting entities for free.MEASUREMENT OF VARIOUS CLASSES OF ASSETSAsset in balance sheet section includes current assets like cash and cash equivalents, inventories, assets classified as held for sale and non-current assets like receivables, property, plant and equipment, intangible assets, heritage assets, biological assets. These assets should be measured using single uniform method according to the standard setters and accounting researcher. But the asset measurement is underdeveloped part of AASB framework (Deegan, C, 2008). Generally, most of the reporting entities follow GAAP (Generally Accepted Principles Of Accounting), where different classes of assets are measured using different methods to best reflect the financial situation of the reporting entity.According to GAAP, cash is measured using face value. Debtors are measured at face value less a provision for doubtful debts. Inventories are measured at lower of cost and net realisable value. Goodwill is measured at cost of acquisition. Property, plant and equipment are measured at cost, recoverable amount or revalued amount. Biological assets are to be measured at fair value less estimated point of sale costs.Also, different industries prefer using different...

Find Another Essay On Asset Measurement, and Accounting Policies and Standards

Difference between rules-based and principles-based accounting standards

718 words - 3 pages result in simpler standards, it would be easier to comprehend and apply to a broad range of transactions because standards are developed based on rules. Rules are insufficiently flexible to accommodate future developments in the marketplace. This has resulted in accounting for unanticipated transactions that is less transparent."(4) The use of principles-based accounting standards may provide accounting statements that more accurately reflect a

Measurement and Scaling Concepts Essay

574 words - 2 pages In research, measurement is the series of actions or methods researchers use to observe and record the information collected as part of a study. In order to understand measurement the researcher much understand the basic ideas entailed in measuring, such as the stages of measurement that help the researcher decide how to make sense of data from particular variables in a study as well as the reliability of the measurement. The researcher

Benchmarking and Performance Measurement

1575 words - 6 pages Bench marking is setting some standard to the level of products and services being produced or offered to customers while still minimizing costs. The role of benchmarking is providing a reference point. The discipline of bench marking is focused on analyzing, identifying, studying and adopting best practices in an organization like customer satisfaction, product quality, throughput and implementing the findings. Performance measurement is the

Teaching Measurement and Fractions

1332 words - 5 pages , Helding, and Baek (2006) who report that students’ understanding of fractions reflect that most struggle with conceptualizing fractions, and that this is true not just nationally but also globally. According to Barnett-Clarke, Fisher, Marks and Ross (2010) teachers need to help students conceptualize fractions as an extension of the way in which we use whole numbers. They contend that measurement opportunities offer an effortless evolution from

Depreciation and sale of asset

959 words - 4 pages lathes, any capital expenditure made must be added to the purchase price of the lathes. This amount will be considered as the historical cost and will be used in calculating the depreciation expense Depreciation is the allocation of the cost of a non-current asset less its estimated disposal value against revenue over the assets useful life. A depreciable asset is an asset that will be used over more than one accounting period and will gradually

Asset Identification and Classification Policy

3063 words - 13 pages Asset Identification & Classification Policy Policy Definition It is the goal of this organization to implement the policies necessary to achieve the appropriate level of protection for each corporate asset. Standard Protecting each asset requires collaboration from every employee. Different assets have a different probability of failure do to vulnerabilities, threats and require annual information security training for each employee

Traditional and Contemporary Performance Measurement

1241 words - 5 pages terms. This system does not provide non-financial measures that are also link to the organization’s business strategy. The application of this system is basically suitable for mass production companies with the purpose of minimizing cost. The factors, such as global competition, technology improvement and the economic growth force the company to modify its performance measurement system. By only evaluating the performance from accounting information

MICROSTRIP ANTENNA ANALYSIS AND MEASUREMENT

907 words - 4 pages ELE 3330 Laboratory Experiment: Microstrip Antenna Analysis and Measurement Lee Sim Heung (Student ID: 0065 4331) Yam Chun Kit (Student ID: 0075 8792) Date of Experiment: 12th March 2002 Objective Analyze the microstrip antennas by the transmission line model. Measure the resonant frequency and antenna gain of a microstrip antenna.Introduction Microstrip antenna has advantages that small size, light weight, simple and inexpensive to manufacture

Leadership and ISLLC Standards

1511 words - 7 pages aligns with standard 1 of the ISLLC standards. Communication is essential for a leader to convey a shared vision of learning outcomes for the students and strives for all students to be academically and socially successful. Effective communication of a good leader is the ability to lead and persuade all involved in the vision of the learning process, by communicating what that process is and the strategies to implement the process of learning for all

Happiness and Impossible Standards

638 words - 3 pages culture’s ideal person operating at their top capacity. In our current society the duplicity of standards in relation to virtue makes it difficult for anyone to attain. To discover true happiness, man must first discover himself. Physiologically, happiness is activity of the mind, predominantly in the left prefrontal cortex, anterior cortex, and the amygdale. Recent studies made possible by scanning systems such as MRIs and Positron Emission

Recognition And Measurement In Financial Statements

598 words - 3 pages Recognition and Measurement in Financial StatementsExecutive SummaryRecognition in financial statements is the process of recording the effects of any economic event pertaining to various accounts of an entity. The item is recorded after being identified as an asset, liability, revenue, expense or others similar to it. The decision that should be taken on what characteristic of an item should be measured and its unit of measure falls under the

Similar Essays

Chapter 1 Financial Reporting And Accounting Standards

7652 words - 31 pages Copyright © 2011 John Wiley & Sons, Inc. Kieso, IFRS, 1/e, Solutions Manual (For Instructor Use Only) 1-1 CHAPTER 1 Financial Reporting and Accounting Standards ASSIGNMENT CLASSIFICATION TABLE Topics Questions Cases 1. Global markets. 1 2. Environment of accounting. 2, 3, 4 4, 5, 7 3. Objective of financial reporting. 5, 6, 7, 8, 9, 10 2 4. Standard-setting organizations. 11, 12, 13, 14, 15, 16, 17, 18 1, 3, 6 5. Financial reporting

Governmental Accounting Standards Board 67 And 68

589 words - 3 pages As financial accounting has its set of rules, governmental accounting has its own. Governmental entities in preparing financial statements and related accounting report must follow the rules set by the Governmental Accounting Standards Boards (GASB). On June 25, 2012, in Norwalk, CT, the Governmental Accounting Standards Board has voted two new standards that will considerably change and develop the accounting and financial reporting of public

Proposed Accounting Standards Changes And Their Effects On

892 words - 4 pages Discussion of the Changes Proposed by the International Accounting Standards Board and How These Changes Will Affect the United States’ General Accepted Accounting Practices The changes that are proposed by the International Accounting Standards Board (IASB) will affect the United States’ Generally Accepted Accounting Principles (GAAP). These changes may have the most significant effects in the areas of revenue recognition, leases, and financial

The Advantages And Disadvantages Of New Accounting Standards Ifrs

968 words - 4 pages important as key accounting rule makers worldwide work toward the goal of convergence. At the forefront is the IASC, committed to developing standards that will bring consistency to accounting policies worldwide. To protect Australia's interests, Australian business community and government have to work close with IASC, to ensure that Australia is well placed to adopt IFRS standards and secure its position in global capital market.Reference:Baxter