Reference no: EM131301655 , Length: 2800 Words
Individual research assignment, Weighting 20%
Research topic: Historical cost versus fair value accounting for non-financial assets
Word limit: 2500 words (excluding references)
The choice between fair value and historical cost accounting has been a widely debated issue in the accounting literature (Christensen & Nikolaev, 2013). However, the conceptual framework for international financial reporting (hereafter the IASB Framework) does not prescribe a specific measurement base to account for the key elements in financial reports (the IASB Framework 2010). Specific measurement methods for different accounting elements are provided in the specific international financial reporting standards (IFRS). Unlike most other accounting standards, IFRS provides a free choice between fair value and historical cost accounting for the non-financial asset groups: property, plant and equipment (PPE) (see IAS 16) and intangibles (see IAS 38). This has resulted in variations in valuation practices for PPE and intangible assets.
Required
1. Refer to the current IASB Framework and IFRS 13 Fair Value measurements, briefly explain the measurement concepts in relation to historical cost and fair value accounting.
2. Evaluate the benefits and challenges of using historical cost and fair value accounting for PPE and intangibles, by reviewing accounting literature.
3. Identify valuation practices (in relation to the use of historical cost and fair value accounting) for the following non-financial asset groups: PPE and intangibles, by reading the ‘accounting policy’ sections of three listed companies’ 2014 annual reports. Note: You are required to select one company listed on your home country’s stock exchange, one company listed on the New York Stock Exchange, USA, and the third one is selected from the Australian Securities Exchange.
4. Analyse if the valuation practices for PPE and intangibles are consistent across the three companies.
5. What is your opinion on the free choice between historical cost and fair value accounting for PPE and intangibles: should such free choice be continued in practice? Or should it be abandoned? Justify your answer.
References
Christensen, Hans B. & Nikolaev, Valeri V., (2013). Does fair value accounting for non-financial assets pass the market test? Review of Accounting Studies, 18(3), pp 734-775.
Missonier-Piera, Franck., (2007). Motives for fixed-asset revaluation: An empirical analysis with Swiss data, The International Journal of Accounting, 42(2), pp186–205.
How you deal with such a complex predicament as hr director
: Respond to the main question asked above about how to deal with a German employee. How would you deal with such a complex predicament as an HR Director? How would you deal with compensation issues?
|
How these issues intersect with the world of business
: BUGEN 5930 Business, Society& the Planet Assessment- Reflective Journal - Sustainable Business. Over the first three weeks of this course, students are required to consider the sustainability-related issues and themes explored in the course and ref..
|
Define a local area network
: Discuss how LANs can make multivendor processing equipment compatible ? What are the two basic underlying transmission techniques used for LANs? Compare these using a minimum of eight characteristics.
|
Evaluate current global economic conditions
: Evaluate current global economic conditions and their effect on local macroeconomic indicators in your selected country. Consider forecasts for population growth, GDP growth, GDP per capita growth, export growth, and sales growth.
|
Historical cost versus fair value accounting
: Research topic: Historical cost versus fair value accounting for non-financial assets, The choice between fair value and historical cost accounting has been a widely debated issue in the accounting literature (Christensen & Nikolaev, 2013).
|
Explain how the country deals with concept of chronemics
: Select a developing country and explain how the country deals with concept of chronemics. Justify your response and describe your findings with examples.
|
What is the basic function of a media gateway controller
: What is one very obvious way to reduce delay? On G.711 circuits, the lost packet rate objective is? Name at least two ways to handle the presence of a lost packet ? What is the basic function of a media gateway controller?
|
Traditional neoclassical theory
: In traditional neoclassical theory, why are some workers paid less than others? And what would happen if government or unions force businesses to pay higher wages?
|
How many bytes (octets) can we expect in the payload
: Given an IP packet used for voice transport. Assume G.711 or G.726 coders. How many bytes (octets) can we expect in the payload?
|