Question? Call Us  +1 (817) 546-4770

ACC202 Financial And Managerial Accounting

Academic Anxiety?

Get an original paper within hours and nail the task

156 experts online

Free Samples

ACC202 Financial And Managerial Accounting

.cms-body-content table{width:100%!important;} #subhidecontent{ position: relative;
overflow-x: auto;
width: 100%;}

ACC202 Financial And Managerial Accounting

0 Download9 Pages / 2,074 Words

Course Code: ACC202
University: Singapore University Of Social Sciences

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: Singapore

Question:
Based on the above arguments, write an essay on the relevance of fair value accounting in the contemporary world. In your demonstration you should highlight of whether fair value accounting is applicable for a wide range of private and public sector organisations in corporate reporting. Also, explain whether fair value accounting has had any influence on the subprime and/or other crises in the contemporary world. The expectation is that a reasonable amount of research articles (academic and professional) are used in the body of the essay.

Answer:
Introduction
Fair value is the tool that uses the market prices for the valuation of the assets and liabilities of the company for the preparation of the financial statements. It is the estimated price at which an asset is sold or a liability is paid off with any third party under the prevalent market conditions. The main idea behind fair value accounting is to consider the prices that the companies are ready to pay under active market. Active market means the one in which there is a lot of transactions that are very high and that includes lot of sufficient information about the prancing. Also, it is important that from the market the fair value is taken from should be the principle market for the assets and liabilities of the company (Andiola, et al., 2018). Greater volume of transactions leads to better pricing and companies should always look out for that. Now many companies are trying to adopt this practice of fair value marketing for the preparation of the financial statements under contemporary world of accounting. This means that the assets and liabilities would be reflected in the financial statement at their fair values. It is also important to consider that fair values should be taken as a basis on which the performances of the company are being evaluated. In this assignment we will discuss what are the overall implication of taking fair value accounting in the contemporary world and how the companies around the world are affected by this (Appelbaum, et al., 2018).
Analysis
In the given assignment, Laux and Lez have stated that fair value accounting and the debate that is related to that will not die soon. There are many factors that the companies need to consider when they are selecting any specific method for the measurement of their items, to make sure that the measurement is to the best of the ability of the company and incurs the best result under any given situations (Axelsen, et al., 2017).
Fair value reporting has been considered in many companies as a basis for the measurement of the value of the financial assets of the company, and the financial instruments that they deal in the market, but for traditional items of the balance sheet this method is still not consider that applicable as the management feels that it might under value or over value the asset in some cases. So, we see that there is a negative approach on part of the management, also one more reason why companies don’t consider this is a good option is because they are not having active market for all the items so at any given point it becomes difficult to ascertain what the fair value would be. Also, there are lot of fluctuation happening and that gives an unstable approach to the financial statements if they are prepared based on the fair value accounting (Bailey, et al., 2017). The aim should be that companies should present the correct value of their assets and liabilities and that is possible only when there is stability in the overall approach of the management and that is not possible in this context.
Also, we see that companies both private and public are very sceptical when it comes to applying these principles given the overall level of complexity involved in the valuation of the same. Thus, they do not prefer that they use it for their overall general reporting framework, though the authorities are trying to incorporate the same in their corporate reporting framework. There are many challenges that the companies must face in general thus they do not prefer to apply such kind of measurement method that would require added cost and efforts as they must take help from valuation experts for the determination of the fair market value (Bumgarner & Vasarhelyi, 2018). Also, there are various approach for its measurement like the market value approach, income approach and cost approach. So different companies can opt for different methods and measuring very item of the balance sheet on different approaches is not feasible as it will render a redundancy to the information that the management is providing in their annual reports. It will be difficult for the stakeholders also to ascertain which measure has been adopted and whether it is feasible or not (Garon, 2018). Thus, it means that on various grounds the management will struggle in case they adopt this basis of measurement for the company. They should also see that the authorities are trying that they can incorporate this principle of corporate reporting in the long run, but in that way, we can see that there are areas in which it won’t be feasible like measurement of the inventory, or the property plant and equipment, because they need to consider the concept of depreciation also. So, we see that it is a very complex method altogether (Fukukawa & Mock, 2011).
Also the concept of fair value accounting is having relevant effect on the subprime and other crises of the world because people are considering which methods to employ for the measurement of the assets, as at any given day the market price would be the amount that which the companies would sale of their products and that should be its value technically but when it comes to preparation of the financial statement this is a wrong method and can make the process very complex, thus the need of the hour is that the issues that are related to contemporary accounting should be taken care of in such a way that correct value is presented in that (Heminway, 2017). Fair value measurement is adopted as a technique for the measurement of assets of the company like financial instruments because they are traded in market and there is active market present for them, which is not available for many other items of the balance sheet. Hence it makes the entire process complex.
Conclusion
Based on the overall analysis it can be said that companies should try to see whether they can employ these measurement policy of fair value reporting and with time there would be many changes that would make it feasible enough to apply these principles but the authorities need to do a  lot of research for that because accounting as a concept should remain static if not anything else and investors should get the correct information of what they are indulging and investing in and in what ways would this be feasible for them in the long run.
In the given case two companies have been selected that are listed on the Australian Stock Exchange. The two companies are Telstra Corporation and TPG Telecom. Both are companies belongs to the telecommunication sector and are one of the leading companies in Industry (Mock, et al., 2018).
Telstra Corporation deals in consumer electronic goods like mobile phones, software etc. It also helps in providing services to the business for installation and management of their telecommunication lines. It works under two levels, business to consumer and business to business. The overall operations of the company are limited to Australia and the company is also considering moving to other countries also.
TPG Telecom is an Australian Company that provides consumer mobile services and business internet services. It is more of consumer oriented company and there is not much business to business transactions. Most of the services that they provide are very reliable and easy to use for the consumer.
In the given part, the fair value accounting measures that these specific companies adopted is cited and presented and explained below.
In the given below extract it can be seen how the company is valuing the identifiable intangible assets at the fair market value at which they have acquired it. It is stated that the discretion of the management of the company in ascertaining that appropriate judgement is involved in the valuation of the intangible assets at their fair value. It involves estimating time and amount of future cash flows that have been derived and the rate at which the rate at which these cash flows are discounted are also taken into consideration for the management (Lessambo, 2018). These estimations are based on several factors that includes current forecasts done, considering the overall growth rates for the costs, the overall operating costs and the useful life of the asset overall (Sirois, et al., 2018). Thus, we see that there is a lot of judgement elements that is involved on part of the management and thus they need to be sure before taking any steps and often requires help of valuation specialists. But this can be applied only in case of intangible assets, in case of property plant and equipment the same is not considered (Segal, 2017). The auditor has stated the same in their audit report under key audit matters and considered it as a matter of importance and where there can be certain risk elements involved that can affect the position of the company and of the investors.
TPG Telecom 
In case of TPG telecom the assets and liabilities are measured at historical cost expect those that have been acquired under normal course of business combination means in cases where there have been any merger or acquisition. In that case the assets and liabilities have been measured at fair value of accounting and their position has been considered as an important element for the corporate reporting segment of the company.
The company has given off right shares to the shareholder and have valued the same at fair value. For assets that have been acquired under business combination the company has followed Inventories are measured at normal sales prices that prevail under normal business conditions, and in case of intangible assets they have taken into consideration the discounted cash flow method. For valuation of property plant and equipment they have quoted market price for similar items. 
Thus, based on all this it can be said that method of valuation is Many but it depends on entities which they choose. Between the two companies TPG has made better disclosure of the methods adopted and have stated it clearly the methods are also very diverse. Which in case of Telstra is very limited and there is only very asset that are valued as per fair value approach.  
References
Andiola, L., Lambert, T. & Lynch, E., 2018. Sprandel, Inc.: Electronic Workpapers, Audit Documentation, and Closing Review Notes in the Audit of Accounts Receivable. Issues in Accounting Education, 33(2), pp. 43-55.
Appelbaum, D., Kogan, A. & Vasarhelyi, M., 2018. Analytical procedures in external auditing: A comprehensive literature survey and framework for external audit analytics.. Journal of Accounting Literature, 40(1), pp. 83-101.
Axelsen, M., Green, P. & Ridley, G., 2017. Explaining the information systems auditor role in the public sector financial audit. International Journal of Accounting Information Systems, 24(1), pp. 15-31.
Bailey, C., Collins, D. & Abbott, L., 2017. The Impact of Enterprise Risk Management on the Audit Process: Evidence from Audit Fees and Audit Delay. Auditing: A Journal of Practice & Theory, 37(3), pp. 25-46.
Bumgarner, N. & Vasarhelyi, M., 2018. Continuous auditing—a new view.. Continuous Auditing: Theory and Application, 20(1), pp. 7-51.
Fukukawa, H. & Mock, T., 2011. Audit risk assessments using belief versus probability. Auditing: A Journal of Practice & Theory, 30(1), pp. 75-99.
Garon, J., 2018. Ownership of University Intellectual Property. Cardozo Arts & Ent. LJ, 36(1), p. 635.
Heminway, J., 2017. Shareholder Wealth Maximization as a Function of Statutes, Decisional Law, and Organic Documents. SSRN, pp. 1-35.
Kachelmeier, S., Schmidt, J. & Valentine, K., 2018. The disclaimer effect of disclosing critical audit matters in the auditor’s report. SSRN, 2(1), pp. 1-39.
Kangarluie, S. & Aalizadeh, A., 2017. ‘The expectation gap in auditing. Accounting, 3(1), pp. 19-22.
Lessambo, F., 2018. Audit Risks: Identification and Procedures. Auditing, Assurance Services, and Forensics, 3(1), pp. 183-202.
Mock, T. J., Ragothaman, S. C. & Srivastava, R. P., 2018. Using Evidential Reasoning Technology to Enhance the Audit Quality Assurance Inspection Process. Journal of Emerging Technologies in Accounting, 15(1), pp. 29-43.
Mubako, G. & O’Donnell, E., 2018. Effect of fraud risk assessments on auditor skepticism: Unintended consequences on evidence evaluation. International Journal of Auditing, 22(1), pp. 55-64.
Segal, M., 2017. ISA 701: Key Audit Matters-An exploration of the rationale and possible unintended consequences in a South African. Journal of Economic and Financial Sciences, 10(2), pp. 376-391.
Sirois, L., Bédard, J. & Bera, P., 2018. The informational value of key audit matters in the auditor’s report: evidence from an Eye-tracking study.. Accounting Horizons., 32(2), pp. 141-162.

Free Membership to World’s Largest Sample Bank

To View this & another 50000+ free samples. Please put
your valid email id.

E-mail

Yes, alert me for offers and important updates

Submit 

Download Sample Now

Earn back the money you have spent on the downloaded sample by uploading a unique assignment/study material/research material you have. After we assess the authenticity of the uploaded content, you will get 100% money back in your wallet within 7 days.

UploadUnique Document

DocumentUnder Evaluation

Get Moneyinto Your Wallet

Total 9 pages

PAY 5 USD TO DOWNLOAD

*The content must not be available online or in our existing Database to qualify as
unique.

Cite This Work
To export a reference to this article please select a referencing stye below:

APA
MLA
Harvard
OSCOLA
Vancouver

My Assignment Help. (2021). Financial And Managerial Accounting. Retrieved from https://myassignmenthelp.com/free-samples/acc202-financial-and-managerial-accounting/contemporary-world.html.

“Financial And Managerial Accounting.” My Assignment Help, 2021, https://myassignmenthelp.com/free-samples/acc202-financial-and-managerial-accounting/contemporary-world.html.

My Assignment Help (2021) Financial And Managerial Accounting [Online]. Available from: https://myassignmenthelp.com/free-samples/acc202-financial-and-managerial-accounting/contemporary-world.html[Accessed 18 December 2021].

My Assignment Help. ‘Financial And Managerial Accounting’ (My Assignment Help, 2021) accessed 18 December 2021.

My Assignment Help. Financial And Managerial Accounting [Internet]. My Assignment Help. 2021 [cited 18 December 2021]. Available from: https://myassignmenthelp.com/free-samples/acc202-financial-and-managerial-accounting/contemporary-world.html.

×
.close{position: absolute;right: 5px;z-index: 999;opacity: 1;color: #ff8b00;}

×

Thank you for your interest
The respective sample has been mail to your register email id

×

CONGRATS!
$20 Credited
successfully in your wallet.
* $5 to be used on order value more than $50. Valid for
only 1
month.

Account created successfully!
We have sent login details on your registered email.

User:

Password:

MyAssignmenthelp.com has become one of the leading assignment help provider in New York City and Boston. We provide top class auditing assignment help. Not only auditing, but we also cover more than 100 subjects and our writers deal with all types of assignments with utmost expertise. To make writing process faster and accurate, we have segmented our assignment experts’ teams as per their expertise on writing different types of assignments. We guaranteed that students who buy our assignment online get solutions worth their investment.

Latest Management Samples

div#loaddata .card img {max-width: 100%;
}

MPM755 Building Success In Commerce
Download :
0 | Pages :
9

Course Code: MPM755
University: Deakin University

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: Australia

Answers:
Introduction
The process of developing a successful business entity requires a multidimensional analysis of several factors that relate to the internal and external environment in commerce. The areas covered in this current unit are essential in transforming the business perspective regarding the key commerce factors such as ethics, technology, culture, entrepreneurship, leadership, culture, and globalization (Nzelibe, 1996; Barza, 2…
Read
More

SNM660 Evidence Based Practice
Download :
0 | Pages :
8

Course Code: SNM660
University: The University Of Sheffield

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: United Kingdom

Answers:
Critical reflection on the objective, design, methodology and outcome of the research undertaken Assessment-I
Smoking and tobacco addiction is one of the few among the most basic general restorative issues, particularly to developed nations such as the UK. It has been represented that among all risk segments smoking is the fourth driving purpose behind infections and other several ailments like asthma, breathing and problems in the l…
Read
More
Tags:
Australia Maidstone Management Business management with marketing University of New South Wales Masters in Business Administration 

BSBHRM513 Manage Workforce Planning
Download :
0 | Pages :
20

Course Code: BSBHRM513
University: Tafe NSW

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: Australia

Answer:
Task 1
1.0 Data on staff turnover and demographics
That includes the staffing information of JKL industries for the fiscal year of 2014-15, it can be said that the company is having problems related to employee turnover. For the role of Senior Manager in Sydney, the organization needs 4 managers; however, one manager is exiting. It will make one empty position which might hurt the decision making process. On the other hand, In Brisba…
Read
More

MKT2031 Issues In Small Business And Entrepreneurship
Download :
0 | Pages :
5

Course Code: MKT2031
University: University Of Northampton

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: United Kingdom

Answer:
Entrepreneurial ventures
Entrepreneurship is the capacity and willingness to develop, manage, and put in order operations of any business venture with an intention to make profits despite the risks that may be involved in such venture. Small and large businesses have a vital role to play in the overall performance of the economy. It is, therefore, necessary to consider the difference between entrepreneurial ventures, individual, and c…
Read
More
Tags:
Turkey Istanbul Management University of Employee Masters in Business Administration 

MN506 System Management
Download :
0 | Pages :
7

Course Code: MN506
University: Melbourne Institute Of Technology

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: Australia

Answer:
Introduction
An operating system (OS) is defined as a system software that is installed in the systems for the management of the hardware along with the other software resources. Every computer system and mobile device requires an operating system for functioning and execution of operations. There is a great use of mobile devices such as tablets and Smartphones that has increased. One of the widely used and implemented operating syste…
Read
More
Tags:
Australia Cheltenham Computer Science Litigation and Dispute Management University of New South Wales Information Technology 

Next

Need an essay written specifically to meet your requirements?

Choose skilled experts on your subject and get an original paper within your deadline

156 experts online

Your time is important. Let us write you an essay from scratch

Tips and Tricks from our Blog

PROJ6016 Employer Based Project

Free Samples PROJ6016 Employer Based Project .cms-body-content table{width:100%!important;} #subhidecontent{ position: relative; overflow-x: auto; width: 100%;} PROJ6016 Employer

Read More »

PPMP20009 Marking Rubric

Free Samples PPMP20009 Marking Rubric .cms-body-content table{width:100%!important;} #subhidecontent{ position: relative; overflow-x: auto; width: 100%;} PPMP20009 Marking Rubric

Read More »