Essay on Volkswagen Adopt IAS

ASC 320-10-35-35: “In periods after the recognition of an other-than-temporary impairment loss for debt securities, an entity shall account for the other-than-temporarily impaired debt security as if the debt security had

When the FASB originally deliberated Statement 144, it considered and rejected requests for a limited exception to the fair value measurement for impaired long-lived assets that are subject to nonrecourse debt. Some constituents believed that the impairment loss on an asset subject entirely to nonrecourse debt should be limited to the loss that would occur if the asset were put back to the lender. The FASB decided not to provide an exception for assets subject to nonrecourse debt. In its basis for conclusions, the FASB explained that the

25-7 If a loss cannot be accrued in the period when ti is probable that an asset had been impaired or a liability had been incurred because the amount of loss cannot be reasonable estimated, the loss shall be charged to the income of the period in which the loss can be reasonably estimated and shall not be charged retroactively to an earlier period. All estimated losses for loss contingencies shall be charged to income rather than charging some to income and others to retained earnings as prior period adjustments.”

The company also provides the following disclosure relating to the useful lives of its depreciable assets

Classifying how the income statement needs to be coded for Lads & Lassies is a two step processes. I will be using the data provided in the case along with information from FASB's Accounting Standards Codification. FASB's coding system is being used to help prepare the layout and ensure proper reporting of the items listed in the case analysis. Some minor changes need to be done to the income statement format to make it presentable which will be noted in the analysis. Please reference Appendix A throughout the analysis to see how the income statement is ultimately being

The value of a deferred tax asset is calculated by taking the financial reporting standards for book income and the jurisdictional tax authority’s rules for taxable income. (Investopedia. 2007) A deferred tax liability arises when a company’s balance

A deferred tax liability is recognized for temporary differences that will result in taxable amounts in future years. In Packer, Inc’s case, depreciation has been recognized as deferred tax liabilities. Packer uses straight-line depreciation, for tax purposes, the cost of the depreciable recourses may have been deducted faster than that for financial reporting purposes.

If the cost of an available-for-sale security exceeds its fair value by $40,000, the entry to recognize the loss

Derivatives, embedded derivatives (in certain contracts) and non-financial derivatives measured at fair value. If the non-financial derivatives are exempt from derivative treatment based upon expected purchase, sale or usage requirements the management will be the one to decide on what kind of measurement they will use, as they need to classify what kind of financial asset or liabilities is that and purpose of it.

Fraser, L. M., & Ormiston, A. (201). Understanding financial statements (9th ed.). Upper Saddle River, NJ: Prentice Hall.

The fair value of an asset is defined as ‘the price that would be received to sell an asset paid to transfer a liability in an orderly transaction between market participants at the measurement date” (Kieso, Weygandt, & Warfield, 2012). It is a market based measure (Averkamp, 2014). Over the past few years, Generally Accepted Accounting Principles has called for the use of fair value measurement in a company’s financial statements. This is what is referred to as the fair value principle (Kieso, Weygandt, & Warfield, 2012). The fair value of an asset or liability is based on an estimate of what the asset should be worth at the time of sale. This gives rise to some conflict among accounting professionals. It is believed that fair value may not be as accurate

technology project. The BPTO produced weekly status reports and monthly budget reviews helping the company gauge where it was heading towards. Thus the alignment started advancing (Austin, 2007).

The definition of "derivatives" is also very wide, and includes options and warrants, whoever they are issued by, as well as rights and interests in respect of listed securities (or other derivatives).

Deferred tax amounts that are related to specific assets or liabilities should be classified as current or noncurrent based on

All entities that hold financial assets or commitments to extend credit that are not accounted for at fair value through profit or loss