QUESTION FOUR An accounting assistant of yours has been criticized over a piece of assessed work that he produced for his study course for the giving the definition of a non-current asset as a “physical asset of substantial cost, owned by the company, which will last for longer than one year”. Required Provide an explanation to your assistant of the weaknesses in his definition of non-current assets when compared to the International Accounting Standards Board’s (IASB) view of assets.

QUESTION FOUR An accounting assistant of yours has been criticized over a piece of assessed work that he produced for his study course for the giving the definition of a non-current asset as a “physical asset of substantial cost, owned by the company, which will last for longer than one year”. Required Provide an explanation to your assistant of the weaknesses in his definition of non-current assets when compared to the International Accounting Standards Board’s (IASB) view of assets.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter2: The Accounting Information System

Section: Chapter Questions

Problem 16CE: CORNERSTONE 2.1 Cornerstone Exercise 2-16 Qualitative Characteristics Three statements are given...

See similar textbooks

Similar questions

Question #5 b. What is the difference between User Specific Qualities and Primary Qualitative Characteristics? c. If I want to book one month depreciation of $270.12 for an asset, what is the journal entry? d. List the four importance of accounting standards. e. Please give the three things considered and posted when disposing of a fixed asset.
Hw would you best define an intangible asset? A. Assets that dont impact the company's valuation B. Assets with physical traits, such as property or equipment C. Assets not recorded on the Balance Sheet, such as customer loyyalty or intellectual property D. Assets that were added to the company in the most recent annual report E. Assets that depreciate at an accelerated rate
Exercise 22-10 Listed below are various types of accounting changes and errors.For each change or error, indicate how it would be accounted for using the following code: 1. Change in a plant asset’s salvage value. select a type of accounting approach 2. Change due to overstatement of inventory. select a type of accounting approach 3. Change from sum-of-the-years’-digits to straight-line method of depreciation. select a type of accounting approach 4. Change from presenting unconsolidated to consolidated financial statements. select a type of accounting approach 5. Change from LIFO to FIFO inventory method. select a type of accounting approach 6. Change in the rate used to compute warranty costs. select a type of accounting approach 7. Change from an unacceptable accounting principle to an acceptable accounting principle. select a type of accounting approach 8. Change in a patent’s…
Question 1.1 A plant asset with a cost of $360,000 and accumulated depreciation of $342,000 is sold for $42,000. What is the amount of the gain or loss on disposal of the plant asset? $42,000 loss. $24,000 loss. $24,000 gain. $42,000 gain. Question 2.2. A system of internal control is infallible. can be rendered ineffective by employee collusion. invariably will have costs exceeding benefits. is premised on the concept of absolute assurance. Question 3.3. From an internal control standpoint, the asset most susceptible to improper diversion and use is prepaid insurance. cash. buildings. land. Question 4.4. Land improvements should be depreciated over the useful life of the land. buildings on the land. land or land improvements, whichever is longer. land improvements. Question 5.5. Givens Retail purchased land for a new parking lot for $50,000. The paving cost $70,000 and the lights to illuminate the new parking area cost $24,000. Which of the following statements is true with respect…
34a 34 - Which of the following statements about depreciation is false? a) The asset to be depreciated should be among the assets of the enterprise. B) Proportional depreciation method can be applied for all tangible fixed assets. NS) For a property, plant and equipment to be depreciated, its economic life must be more than one year. D) As a result of use, wear, tear, depreciation or obsolescence must be experienced in the tangible asset. TO) Depreciation is a type of expense that does not require a cash outflow.
3) b) Profit before tax for Juventus is estimated at $3,000,000 for the year ended June 30, 2019, during the audit, the team has identified the following errors,i. An error of $3,000 was found in the audit of depreciation expense of the warehouse purchased in January 2019. The management of Juventus have indicated that they do not wish to amend the financial statements.ii. An error of $350,000 in the valuation of work in progress was found as a number of the assumptions contain out of date information. The management of Juventus have indicated that they do not wish to amend the financial statements.Calculate Performance Materiality and utilize this to discuss the appropriate treatment of the above two errors.
CORNERSTONE 2.1 Cornerstone Exercise 2-16 Qualitative Characteristics Three statements are given below. When financial information is free from error or bias, the information is said to possess this characteristic. Griffin Company uses the same depreciation method from period to period. A trash can that is purchased for $10 is expensed even though it will be used for many years. Required: Give the qualitative characteristic or constraint that is most applicable to each of the statements.
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errorspermits a company to change an accounting policy for limited reasons. Which of the following reasons are permitted under the standard?1) The IASB has issued a standard or interpretation that requires thecompany to make the change2) The Finance Director believes a change would improve the amountof profit shown3) There is a change in the useful economic life of an asset thatrequires a greater depreciation charge4) The new policy would improve the reliability and relevance of thefinancial statements Which is the correct option? a) All of the aboveb) 1 and 4 onlyc) 3 and 4 onlyd) 1 only
63. Analyze the following: I – All entities that issue an annual report may issue interim financial report. II – One indicator that sale of a noncurrent asset held for sale is highly probable is that there is an active program to locate a buyer and a complete plan must have been initiated. III – When a component of an entity was discontinued during the current year, the loss on discontinued operation should exclude associated employee termination cost. Given these, we can conclude that: Group of answer choices Only statements I and II are false. Statement II is true. Statement III is not false. Only statements II and III are true.
1) A company acquired a group of assets that does not constitute a business. The company determined that part of the amount paid is related to the assembled workforce (very high quality trained employees) with a fair value of $100,000. The company does not know how to account for the component of assembled workforce and whether the amount of $100,000 should be recognized as a separate intangible asset, as part of other intangible asset, or expensed immediately. Research and cite a specific paragraph in the Accounting Standard Codification that can help the company to determine how this assembled workforce should be recognized. Unless specifically requested, your response should not cite implementation guidance and illustrations. FASB ASC
1. Distinguish among depreciation, depletion and amortization. 2. Identify the factors that are relevant in determining the annual depreciation charge and explain whether these factors are determined objectively or whether they are based on judgment. 3. For what reasons are plant assets retired? Define inadequacy, supersession, and obsolescence. 4. What are the major factors considered in determining what depreciation method use? 5. List the similarities and the differences in accounting treatments of depreciation and cost depletion.
which of the following statements is not correct? 1) generally accepted accounting principles require that the original cost of a long-term asset continue to appear in the asset account until the disposition of the asset. 2)The book value of a long-term asset is reduced each year as depreciation is recorded Building and trucks are examples of long -term assets 3)Salvage value is computed by subtracting the accumulated depreciation from the cost of a long-term asset.