Advanced financial accounting

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Advanced financial accounting

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Table of Contents
Part A.........................................................................................................................................3
Question 1..............................................................................................................................3
Question 2..............................................................................................................................3
Part B..........................................................................................................................................3
Question 1..............................................................................................................................3
Question 2..............................................................................................................................5
Question 3..............................................................................................................................6
Question 4..............................................................................................................................7
References..................................................................................................................................8

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Part A
Question 1
All the companies carry various activities and for that recording of all the transactions are
needed to be made. This is done by making the entries in financial statements. There is the
principle according to which the financial statements are required to be made in a true and
fair manner. The information in them shall represent the true values and all those who are
using them will be able to make the proper decisions with the help of them (Grosanu,
Rachisan and Berinde, 2012). The directors will be making the declaration about the true and
fair view of the financial statements and before signing that it will be required that they
analyze the financial statements on their part. They will be checking the compliance with all
the standards and concepts which are involved. The analysis which is performed by external
auditors will also be considered in the process of signing. It will be checked whether the
disclosure in relation to all the aspects have been made or not. After confirming all of them
the declaration will be signed.
Question 2
Fair value and recoverable value are different from one another and they shall be understood
in an appropriate manner. The price which is agreed by the seller or the buyer of the asset
will be considered to be the fair value. For the ascertainment of the recoverable value, there is
the consideration of fair value less cost and value in use (Enahoro and Jayeoba, 2013). The
one which will be higher among them will be considered as the recoverable amount of the
asset.
The revaluation is done for the assets and in that there is the consideration of the value at
which the asset is carried in the books. In that process, there is the use of the value in use and
then with the help of that, the revaluation will be made to determine the final value of the
asset. To get recorded the value in use shall be higher and that will gain a place in accounts.