Question 1. A Fundamental Standard, The New Zealand International

release, the Company has stated its intention to dismantle the existing operation. The costs to reassemble the operation in the new facility have not yet been finalized. Required: • • In reporting to its U.K. parent under IFRSs, how should Pharma account for the above restructuring program for the year ended December 31, 2011? In reporting to its U.S.-based lender in accordance with U.S. GAAP, how should Pharma account for the restructuring program for the year ended December 31, 2011?

As part of this process, reciprocal accounts and intra-entity transactions must be adjusted or eliminated to ensure that all reported balances truly represent the single entity” (Hoyle, n.d.). The consolidation process varies depending if the business combo took place as a statutory merger/consolidation or if the companies remained as separate legal entities. With mergers/consolidations, consolidation should occur annually because the accounts of the parent and subsidiary were brought together permanently. With separate entities, the consolidated process starts brand new annually since there’s no permanent consolidation. So if the firm goes this route they’d have to consolidate each year through the use of worksheets. Attached is a demonstration of the worksheet that would be

The most important aspect in the financial statement is to follow and regulate the internal control system of the organization. This is the most important point in this act as it detects that the internal control system of the corporations is sound or not. It wants to report about the internal control system of the organization so that the actual picture of the organization

There are many rules companies must follow whenever documenting financial information or any other data which is gather during any business transactions. In order for said companies to report financial information internal controls have to be put in place as companies have to adhere to certain laws and regulations. Internal controls can be defined as a process which companies follow in order to ensure all financial reporting is done in a reliable and lawful manner. Some think of it as a system which works within a system as it plays a major role on the success of a company’s accounting system. At the organizational level, internal control objectives relate to the reliability of financial

Financial controls play an important role in ensuring the accuracy of reporting, eliminating fraud and

IASB. 2010, "The Conceptual Framework for Financial Reporting" IFRS, pp. A21- A38, viewed 23 April 2014,

You will produce a report that justifies and evaluates the tools and frameworks that you used in completion of Assignment 1.

IFRS requires that any assumptions and estimates made should be reasonable under the prevailing circumstances. The management is required to make substantial and reasonable estimates and assumptions of the amounts that should be disclosed in the financial statements. However, the extent of subjectivity is controlled by the requirements and guidelines outlined in IFRS 10. The management should ensure that the consolidated financial statements are in accordance with the IFRS 10 guidelines (Kirk, 2005).

If the market prices are available, the investment is values and reported subsequent to acquisition using the fair value method. When the investor has an interest for 20% to 50% ownership, it is presumed that the investor exercises significant influence over the operating and financial policies of the investee. The FASB lists other factors to determine whether an investor can exercise significant influence over an investee. If significant influence is found to exist, the investor is required to account for the investment using the equity method. When one corporation (the parent) acquires a voting interest in more than 50% in another corporation (the subsidiary), the investor corporation is deemed to have a controlling interest. When the parent corporation treats the subsidiary corporation as an investment, consolidated financial statements are generally prepared.

uses the Generally Accepted Accounting Principles as a regulatory requirement for managing financial resources. These are the guidelines and practices that are accepted in the field of accounting internationally in standardizing financial documents such as balance sheets, cash flow statements and income statements. The organization follows these principles in reporting its financial information. The absence of these standards would give the organization staff the privileges in divulging financial information at their individual expense and not at the company’s thus affecting its overall credibility to investors and

3.1 How quality is measured in relation to IFRS. The adoption of IFRS and why the change?................................................................................

Corporate governance is a set of actions used to handle the relationship between stakeholders by determining and controlling the strategic direction and performance of the organization. Corporate governance major concern is making sure that the strategic decisions are effective and that it paves the way towards strategic competitiveness. (Hitt, Ireland, Hoskisson, 2017, p. 310). In today’s corporation, the primary objective of corporate governance is to align top-level manager’s and stakeholders interest. That is why corporate governance is involved when there is a conflict of interest between with the owners, managers, and members of the board of directors (Hitt, Ireland, Hoskisson, 2017, p. 310-311).

It is an important function of any organisation to regulate the external financial reporting. The legislation that governs the external financial reporting is Financial reporting act 2013 (FRA) and The companies act 1993 (Deegan & Samkin, 2013). The Regulation is required to safeguard the interests of those using the financial information but do not directly participate in the business. These users may be both primary and secondary. The information provided by the financial statements are used for making economic decisions by its users (NZASB, 2016a). The regulation of external financial reporting does not only help the external users

The final responsibility for the integrity of an SEC registrant’s internal controls lies on the management team. U.S. companies need to refer to a comprehensive framework of internal control when assessing the quality of financial reporting to determine that financial statements are being presented under General Accepted Accounting Principles, GAAP. The widely used framework is referred as COSO, Committee of Sponsoring Organizations of the Treadway Commission, sponsored by the following organizations American Accounting Association, the American Institute of CPA’s, Financial Executives International, the Institute of Internal Auditors, and the Institute of Management Accountants. COSO’s defines internal control as:

These factors are insuring that companies are accountable and that the information they provide to their investors is accurate and transparent. Accountability is “ the obligation of an individual or organization to account for its activities, accept responsibility for them, and to disclose the results in a transparent manner. It also includes the responsibility for money or other entrusted property.” (BusinessDictionary.com, 2015). A company is obligated to provide accurate information to their investors, as they are shareholders in the company and thus hold an interest. This information is provided to these investors by these companies preparing General Purpose Financial Reporting (GPFR). These reports contain information such as Profit and Loss Statement, and the Balance Sheet. This Balance sheet depicts the company’s assets and liabilities, which determine the liquidity of a company for that period in time. Transparency is needed when it comes to the interaction between investors and these companies. The information contained in these GPFR must be in a form that investors can simply understand. The information presented must disclose all relevant details regarding the companies financial position. Transparency is “ minimum degree of disclosure to which agreements, dealings, practices, and transactions are open to all for verification.” (BusinessDictionary.com, 2015). In the old standards