What is the definition of “retrospective application”?

Q: What is the purpose of valuation in terms of voluntary assessment?

A: Every organization needs to know the worth value of its assets, business or company.  In other words…

Q: Explain about the modified retrospective approach.

A: Change in accounting principle is a change from one generally accepted accounting principle to…

Q: Why does the FASB recommend the direct method over the indirect method?

A: Definition:   Financial accounting standards board (FASB): This is the organization that creates,…

Q: Explain how the retrospective approach offers consistency and comparability.

A: Retrospective approach is the principle in which previously issued financial statements are recasted…

Q: What are some recent trends regarding absolute versus relativepriority doctrines?

A: The priority rules are methods of making payments to the creditors and shareholders in case of…

Q: What is meant by the terms “new issue” and “seasoned issue”?

A: Answer: A new issue is a mentioned to a security, which was first registered, issued and sold to the…

Q: What is a modified retrospective approach of FASB?

A: Definition: Financial accounting standards board (FASB): This is the organization that creates,…

Q: Explain preemptive right

A: Answer: A pre-emptive right is a benefit that can be granted to other owners in a company that gives…

Q: What is meant by depreciable base? How is it determined?

A: Depreciable base: The word depreciable base is used to depict the value that is divided by the…

Q: Why is a preemptive right important?

A: Preemptive rights means the rights to  be offered to purchase a property before it is offered to…

Q: What is appropriation?

A: Ans. In accounting, appropriation is done for various reasons such as for distribution of gains,…

Q: Define the term End-of-Period Convention?

A: Cash flows refer to the amount of cash that is either invested or received by the company during the…

Q: What amount of gain should be reported as a result of the modification of terms under ifrs?

A: As per the restructuring of terms, 1. Loan reduced by 20% i.e., P3,000,000 * 20% = P 600,000 2. Loan…

Q: Which decision is called the abandonment decision?

A: Answer: The decisions relating to the company that provides flexibility to discontinue the project…

Q: What is the purpose of the Maceda Law?

A: The Maceda Law, also known as The Realty Installment Buyer Act or Republic Act 6552 is the law that…

Q: What are some motives for divestitures?

A: The question is based on the concept of divestiture strategy, which is used by company to overcome…

Q: What is a prior-period adjustment?

A: Statement of retained earnings: This is a financial statement that shows the amount of net income…

Q: What kind of acquisition is it?

A: Mckinsey divided the types of acquisition based on the purpose of such acquisition. 'Acquisition for…

Q: What are the Basic Concepts and Terminology of Replacement-Analysis?a

A: Assets: Assets are those items that provide value for money and future economic benefit for an…

Q: Distinguish between cumulative or noncumulative?

A: cumulative and noncumulative preferred is assumed since the key term is not given.

Q: When is a GAAP departure appropriate?

A: Definition:   Generally Accepted Accounting Principles (GAAP): These are the guidelines necessary to…

Q: What are circumstance-imposed scope limitation and client-imposed scope limitation?

A: Accounting:   Accounting is a system, or a process of collecting and organizing economic…

Q: The purpose of adjustments is to?

A: In simple words, adjusting entries are the changes to the journal entries that are already made in…

Q: Which of the following are substantive tests?

A: For identifying whether the following are substantive tests or not we need to first identify what is…

Q: What occurs under a step acquisition?

A: A step acquisition happens when the acquiring entity acquires control over an entity for which it…

Q: What is the meaning of valuation?

A: Valuation simply refers to the process of ascertainment of the worth of any thing, it can be worth…

Q: What is meant by the term management by exception?

A: Business Management:   Business management refers to the skills associated with running a company…

Q: Retrospectively or Prospectively?

A: As per the general principal of IAS 8 an entity must correct all material prior period errors…

Q: What are some types of divestitures?

A: A divestiture or divestment is the disposal of the company’s assets or a through sale, exchange,…

Q: Define the term confirmatory value.

A:

Q: Name the assumption relates to the qualitative characteristic of timeliness? Explain it.

A:

Q: What are the differences between adjunct account and a contra account?

A: Definition:An adjunct account increases the book value of a liability account.A contra Account…

Q: Explain about the PROSPECTIVE APPROACH: WHEN RETROSPECTIVE APPLICATION IS IMPRACTICABLE.

A: Accounting policies are required to be followed consistently so that, comparability of the financial…

Q: Methods and rules to be followed in case of reconstitution?

A: Solution- It is often noticed that a partnership firm undergoes restructuring. These changes are…

Q: What is the nature of interest? Distinguish between “simpleinterest” and “compound interest.”

A:

Q: What is an unasserted claim?

A: An unasserted claim or assessment is one in which the affected party or potential claimant has not…

Q: Distinguish between participating or nonparticipating?

A:

Q: What are the requirements for a prior period adjustment?

A: Prior period adjustment: A prior period adjustment is the result of a material error discovered in…

Q: Which categories are non value added activities?

A: Non value added activities are those activities that does not actually add value to the product or…

Q: What is interim reporting?

A: Financial Reporting:   It refers to the disclosure of the financial results of the organization to…

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.