Do Accountants Use Their Super Powers

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Do Accountants Use Their Super Powers To Manage Earnings For Good Or Evil Executive Summary The following report is presented in order to show that there is a specific stimulus for the selection of a particular accounting policy or method from a range of its alternatives. In the report, one of the most successful companies of Australia, i.e. Woolworths Limited (, 2015) is chosen and all the requirements of the report are fulfilled keeping this company in mind. The particular area with which the accounting policies relate is tangible fixed asset, and its valuation. For clarity and understanding point of view, the actual examples from the financial statements in the published annual reports of the company in the past…show more content…
More properly, as per the annual reports of Woolworths limited, the description of its tangible fixed assets is shown in the property, plant and equipment head, which says: “Property, plant and equipment is depreciated over its useful life taking into account residual values, where appropriate. Assessments of useful lives and residual values are performed annually after considering factors such as technological innovation, maintenance programs, relevant market information, manner of recovery, and management consideration” (, 2015). As per the company policy, they record asset cost at the amount they pay or promise to pay for the purchase of the fixed asset, plus the amount incurred in order to bring the asset to the working cite of the company and also includes the installation charged if any. Thus, amount paid or to be paid to acquire an asset and all expenses incurred to make asset workable are included in the cost of asset. In the annual report, the amount of $1,180.5 million in the year 2005, $1,411.7 million in the year 2006, $1,121.0 million in the year 2007, $1,748.1 million in the year 2008, and $1,678.2 million in the year 2009 show the cost of assets acquired (, 2015). This cost is calculated exactly as per the method, described above. Requirement # 2 Discuss possible reasons and incentives motivating companies to make certain accounting policy choices. This can be
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