Page 3 Page 7 Page 12 Page 17 Page 20 Positive Accounting Theory Ethics in Accounting Accounting for Physical Assets & Intangible Assets Accounting for Assets in Mining & Agricultural Industries ounting Accounting for Provisions
Positive Accounting Theory (PAT) aims to make good predictions of actual world events and convert them to accounting transactions. Its general objective is to understand and predict the choice of accounting policies across conflicting firms. It recognises that economic consequences exist. In relation to PAT, because there is a need to be efficient, the firm will want to minimise costs associated with the performance indicators used by the firm.
Debt this high drove all crediting to collapse because people could not make payments on their loans, due to the fact that they simply did not have the income to pay. This then created instability within the banks because the revenue necessary to continue was no longer there. All of things added together equated to the largest market crash since the great depression and governments intervention.
The financial crisis that happened during 2007-09 was considered the worst financial crisis in the world since the great depression in the 1930s. It leads to a series of banking failures and also prolonged recession, which have affected millions of Americans and paralyzed the whole financial system. Although it was happened a long time ago, the side effects are still having implications for the economy now. This has become an enormously common topic among economists, hence it plays an extremely important role in the economy. There are many questions that were asked about the financial crisis, one of the most common question that dragged attention was ’’How did the government (Federal Reserve) contributed to the financial crisis?’’
This article talk about the revolution in accounting. The revolution in accounting through five different stages, there are scientific revaluation, accounting disciplinary matrix, anomalies and professional insecurity, alternative proposals and their evaluation and schools of though. For the first stage, scientific revaluation become the fundamental of the accounting revolution. It provides the technical function to accountants as it promote the academic paper works to a more efficient way. Base on the revaluation of scientific, the information about accounting records become more regular pattern. Therefore, the rule of accounting getting more complete and internationalization. After the disciplinary matrix established up, the anomalies and professional insecurity also changed. Rely on the conventional accounting practices the anomalies and professional insecurity has changed a lot. The accountants’ practices used to be critics. However, it turned to level practices. After the revolution of all above, alternative proposals has changed. For example, the asset values used to be based on the historical cost system, but after the alternative proposals and their evaluation, it could be have another way to
The current economic-financial crisis was indeed caused by the simultaneous occurrence of events in different parts of the world that all had a negative effect. These events are subtly different and therefore it is common that only one event is held responsible for the crisis. In reality, the world economy became critical due to the mix of four major events: 1) the unrestrained greed of financiers in the U.S. and U.K., which transformed bad mortgages into toxic financial assets 2) the habit of getting deeply indebted in the U.S. and U.K., 3) the excessive liquidity in Europe, 4) the real estate bubble in the U.S. and some European countries (Thomas, 2011) At the beginning of the financial collapse in the United States, many commentators, among which was the President of the Federal Reserve, hastily affirmed that the situation would only affect the United States and at most, the UK, where the banks,
American debt held by households is rising ominously, plus our economic policies change. That debt balloon powered by radical income inequality will become the next bust. It drives by spending on domestic demand or more likely consumer spending not just by the wealthy, but by everyone else. An important explaining about the unity that emerged from our latest research has shown as relatively that ten percent were prosperous, saving, and investment in which natural and interests to find the path of them in the financial markets, but primarily ninety percent had borrowed. As the result many Americans concern about the financial crisis and the cartoon uses to sarcasm, irony, and logos to convey its message.
The roots of the crash trace back to U.S. regulatory and governmental activity. Thirty years prior, at the birth of financialization and Ronald Reagan’s Administration, certain policies started to favor banks’ activities, particularly with respect to the practical dissolution of antitrust laws during the time and a general
To over view the knowledge we learnt from accounting theory and practice, the main thing I can conclude that is the tendency of accounting will shift away from technical way to people’s behaviour way. By understanding what should do, we should ask why and how we could improve and change it into a better way. This essay aims to explain how the theoretical material that we learn in lectures can be developed under a real practical manner.
Bank institutions as well as mortgage loan officers were encouraging homeownership with the interest of not only gaining a commission but due to the fact that lenders were not going to be responsible if the homeowners did not pay their mortgages. Mortgages were being packaged then sold to investment banks then later sold to investors. Borrowers were arranged in expensive subprime loans and numerous loans were given to people who were not able repay them. Once homeowners were not capable of paying their mortgages investors were the ones who were left with the problems allowing lenders and investment banks to escape through the loop. Banks that were overvaluing the
This article is useful to my study because the article addresses similar problems in some aspects which I am studying in accounting theory subject. That is the management accounting innovation. The article helps me understand the reasons which will change the accounting practice could be from the inside organization where the role of accountants increase. At this point, I improve my understanding about what is the distinction between accounting history and current accounting and explaining why accounting theory needs to be changed in relation to a change in other subjects.
A key point of contention during the housing crisis was issue of who was at fault, the lenders, such as Washington Mutual, as well as other banks for making risky loans (sub-prime mortgages) and using “creative” lending practices or the consumer/customer, for their lack of responsibility in taking out loans they knew they could not afford. In the video, “The Crisis of
The best evidence so far for the existence of an American empire, despite denials to the contrary, is the Global Financial Crisis (GFC). The persistent removal of restrictions and oversights on the domestic financial system of the US, combined with the decisions of individual firms, other governments and foreign financial organisations, culminated in the singe largest depreciation of assets and currency valuations in history, surpassing even the Great Depression in its extents.
It has been become an issue of great concern that the accounting profession must find a common theory in order to address and put the issue at rest. This therefore, has called for the study of this topic under review “the demand for and supply of accounting theories: the market for excuses. As a result of this several questions have been raised. For instance, the question of why accounting theories are predominantly normative has been put forward by this article? Secondly, why no single theory in accounting profession that is generally or widely accepted? It has been argued that the financial accounting theories have been found to be ineffective most especially in the area of impacting accounting practice and policy, though, this has been
The definition of accounting theory according to Coetsee (2010) is described in two different ways. The first philosophy concludes that accounting theory is a set of general principles that guide the evolution of accounting practice. The other philosophy describes accounting theory as activity of explaining and predicting accounting practice. What the viewer can see from the statement of the first philosophy is that the accounting theory exists before accounting practices meanwhile the latter states that the accounting practice exists before the theory. Since there are many arguments about this matter, many academic researchers have concluded that accounting theory can be divided into two categories which are positive and normative theory.