Memorandum Essay

1594 words - 6 pages

Date: 4-11-09Re: Case 3-5A.Discuss the concept of relevance. In your opinion, would the amounts reported by U.S. companies for property, plant, and equipment be more or less relevant than the current cost amounts reported by companies in England, Mexico, or elsewhere?RelevanceInformation is relevant when it influences the economic decisions of users by helping them evaluate past, present, and future or by confirming or correcting their past evaluations. Relevance is also affected by materiality. Information has the quality of relevance when it is 'capable of making a difference in the economic decisions of users by helping them evaluate the effect of past and present events on future net cash inflows (predictive value) or confirm or correct previous evaluations(confirmatory value), even if it is not being used' (FASB, 2005: 2; FASB 1980: 37). In the IASB framework information has the quality of relevance 'when it influences the economic decisions of users by helping them evaluate past, present of future events or confirming, or correcting, their past evaluations' (IASB, 1989: 24). Both frameworks thus say that accounting information is relevant if it has the capacity to make a difference in a decision. The FASB requires information to be capable of making a difference in the economic decisions of users 'even if it is not being used'. However, to be relevant the IASB definition additionally requires that information is used i.e. influences the decision maker in making economic decisions. Another small difference between the FASB and IASB framework is the FASB framework explicitly mentions that relevant information has to have predictive and feedback value, while the IASB uses these terms implicit in its framework. 'The predictive and confirmatory roles of information are interrelated (IASB,1989: 27).First, the FASB framework defines timeliness an ancillary aspect of relevance.Information must be available when users need it. Although timeless alone cannot make information relevant to users, a lack of timeliness may cause a loss of relevance of information reported or even make it irrelevant (FASB, 1980: 56; IASB, 1980: 43).Although the assumptions of the IASB are equal to the assumptions of the FASB, the IASB does not define timeliness as a component of relevance but as a constraint on relevant and reliable information. If the financial statement is published earlier, the relevance of the financial report increases. In the new framework timeliness is expected to be an ancillary aspect of relevance.Second, the IASB framework defines materiality as an attribute of relevance, while in the FASB hierarchy materiality is situated as threshold for recognition. 'Information is material if its omission or misstatement could influence the economic decision of users taken on the basis of the financial statements' (IASB, 1989: 30).However, the materiality criterion may not only affect the relevance of information, it may also have effect on other qualitative...

Find Another Essay On Memorandum

Memorandum for Case Analysis

1206 words - 5 pages TO:Management TeamFROM:HR ManagerRE:Complaints regarding Pat's use of the women's washroomDATE:January 22, 2007Pertinent Facts:Acme Delivery Ltd. is a delivery company that delivers light freight in the greater Vancouver area. Acme has a fleet of seven trucks, four full-time employees, four owner-operator drivers, a part-time accountant and a part-time mechanic.Acme's facility consists of a front office, a parking compound, and a small warehouse

Addressing International Legal and Ethical Issues Memorandum

1568 words - 6 pages Certain legal and ethical issues may arise when conducting business outside the United States. Some companies may not be as resourceful with various contracts when dealing with companies internationally. When a U.S. company enters into an agreement with a company located in another country, the company must consider the rules and regulations of not only that particular country but others as well. A second factor would be a U.S. company must take

Legal System Identification, Comparison, and Analysis Memorandum

1705 words - 7 pages This paper leads the reader through a situation that must be resolved by the court system. This dispute deals with a real-estate issue and its owners. This paper details the issues with the city and subdivision these owners live in. The interesting twist is one owner is a citizen of Switzerland. Jurisdictions of the US court systems determine how this case will be heard. A verdict is decided by the court and then the lawyers can begin the appeal

Legal System Identification, Comparison and Analysis Memorandum

1938 words - 8 pages University of PhoenixBusiness Law BUS/415March 23, 200mMemorandumTo:Law Firm SupervisorCc: Al JonesFrom:Legal TeamDate:3/22/2009IntroMr. Al Jones, a land developer has constructed some of the largest residential subdivisions in and around the City. While in progress of his newest and largest housing subdivision, Mr. Jones' company connected a pipeline to a privately owned underground water supply. Mr. Al Jones in error failed to seek the required

Database paper- Memorandum analyzing the use of databases in your organization - Conclude by proposing improvements.

850 words - 3 pages MemoTo:Consumer Lending Division StaffFrom:Date:Re:Database Management Systems ResearchCurrent database management systemCurrently, there is one main database management system used within our Consumer Lending division as well as two supplementary database management systems that are accessible for additional use. The primary database management system used is the "Vision" database, which not only keeps track of any past or present customers, but


860 words - 4 pages What advice R.J. is likely to give Padrina depends predominantly upon whether she and Orande have an enforceable agreement. For a contract involving an agreement to transfer title to real property, as here, to be enforceable, more than offer, acceptance and consideration must be present. The contract must also comply with the Statute of Frauds. The Statute of Frauds requires that either the contract or some memorandum of it is in writing

CIS/319 Office Automation and Group Collaboration Software Memo

826 words - 3 pages Untitled Running Head: INTEROFFICE MEMORANDUM Office Automation and Group Collaboration Software Interoffice Memorandum University of Phoenix CIS/319: Computers and Information Processing February 9, 2009 Memorandum To: instructor CC: From: student name Date: 2/11/2011 Re: office automation and group collaboration software Confidential Office automation and group collaboration has

Problems with The Decision to Drop the Atomic Bomb

2000 words - 8 pages greatest tragedies against civilians during wartime, something that President Roosevelt had presented to other nations not to do during wartime. In a memorandum to President Truman, Secretary of War Henry Stimson stated; “Within four months we shall in all probability have completed the most terrible weapon ever known in human history, one bomb which could destroy a whole city.” President Truman knew that many civilians would be killed, but this

How to Buy a Limited Company

2055 words - 8 pages companies can be brought out by owning 51% of their shares and thus having controlling command of their affairs. Limited companies shares can be brought on the stock market. There is a substantial amount of paperwork involved in setting up a limited company. For starters you will have to draw up a memorandum of association and articles of association which set out the background details of the company such as its name

To what Extent Did German Foreign Policy Become More Openly Nazi Rather than Purely Nationalist in the Course of 1938?

809 words - 3 pages USSR (originally) to in the long run become a dominant world power.Just before 1938 the Hossbach memorandum was clearly diverging from Conservative Nationalists policies as during the memorandum Hitler Identified his first targets to be Austria and Czechoslovakia, this is not what a Nationalist government would have wanted, there first territorial aim would have that which was lost in Poland through the treaty of Versailles. Also Hitler stated

Psychologically Vulnerable Group of People

882 words - 4 pages the investigative interview. The UK government outlines the Memorandum of Good Practice (1992); propelled by the Pigot Report (1989) and the criminal justice act (1991), in efforts to control the ways in which interviews are constructed throughout the criminal justice system, particularly when a child needs to give evidence in court. It asked that children can submit interview information and give evidence through video connection. This prevents

Similar Essays

Memorandum Of Understanding Essay

1303 words - 5 pages MEMORANDUM OF UNDERSTANDING Dated 12th July,2010. MR.SURIYA JUNGRUNGREANGKIT a citizen of Thailand holding Passport Number:X782555 residing at Mo-ban far piyarom Soi 102, Pathumthani. 10110 Bangkok Thailand, (hereinafter referred to as the “Investor”) as the Party of the Other Part. AND MR.PHILIP POWEL carrying on business at ...........................................,holding Passport No........................... (hereinafter

State Police Department Memorandum Essay

1962 words - 8 pages The purpose of this memorandum is to provide you with some information on the expected ethical conduct of all State police officers and employees with the State Police Department. It has been brought to my attention that there are several ethical violations that are being carried out on a regular routine by the police officers and staff of this department. This memo will explain the ethical dilemmas that are faced everyday by the officers of

Southwest Texas State University Parking Control Memorandum

1846 words - 7 pages Southwest Texas State University Parking Control Memorandum Over the past few years, the parking control office has been expanded and made more efficient by the addition of computers and the implementation of new filing procedures. Unfortunately, the department is still not providing the services it is capable of. This is due to the fact that the parking control office is under staffed in respect to counter attendants. This lack of

Essay On Manipulation Through Language In The Memorandum

1323 words - 5 pages Manipulation through Language in The Memorandum     How one utilizes language to perpetuate certain images or perspectives can greatly influence the way people think. One can use language to manipulate the minds of others and bring them under some form of subjugation. In Vaclav Havel's The Memorandum certain characters use this tactic of manipulation through different means that involve language, and in the process, they gain the