ACC210(ATMC) Financial Accounting Assignment

ACC210(ATMC) - Financial Accounting
Task 2 – Major Assignment
Semester 2 - 2017
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Table of Contents
Question 1. Ex 3.1................................................................................................. 3
Accounting Justification:.................................................................................. 3
Relevant Issues:.............................................................................................. 3
1. Determine subject of measurement............................................................3
2. Determine valuation premise/method.........................................................3
3. Determine market....................................................................................... 3
4. Determine Valuation technique...................................................................3
Question 2. Ex 5.18............................................................................................... 4
Accounting Justification:.................................................................................. 4
Relevant Issues:.............................................................................................. 4
1. Calculations & General Journal Entries 1/7/16 to 30/6/17:...........................4
2. Calculations & General Journal Entries 1/8/18:............................................4
3. Calculations & General Journal Entries 30/6/18:..........................................4
Question 3. Ex 6.11............................................................................................... 5
Accounting Justification:.................................................................................. 5
Relevant Issues:.............................................................................................. 5
1. Explain accounting issues...........................................................................5
2. Differences Internally Generated vs Acquired.............................................5
3. Reasons for Reluctance............................................................................... 5
Question 4. Ex 9.19............................................................................................... 6
Accounting Justification:.................................................................................. 6
Relevant Issues:.............................................................................................. 6
1. Deficit of Fund............................................................................................. 6
2. Net Defined Benefit Liability........................................................................6
3. Net Interest................................................................................................. 6
4. Reconciliation.............................................................................................. 6
5. Summary Journal......................................................................................... 6
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Question 1. Ex 3.1
Accounting Justification:
According to AASB the assets are the resource which controlled by a company as
the result of the past events.
Relevant Issues:
In this problem we focus on measurement of fair value by determination of the
various valuation techniques and various type of assets valuation methods
(Warren Ruppel, 2017.pp 98).
1. Determine subject of measurement
At the fair value there are two types of assets could be measure, one is land
another one is factory. As the alternative option land and the factory are
consider as the single assets.
2. Determine valuation premise/method
The sale of land could be for the purpose of residence with estimation of $1
million. The land could be sold for the residential purpose for $900,000 also the
cost incurred for the demolishing the factory is $100,000 (
Isabel Gordon,
2009..pp 72). In this scenario measurement of the fair value for the specific use
of land on the basis of in exchange valuation premise because land is consider
on a standalone basis. By the reporting entity the depreciation on factory half of
the original cost, cost for construct the new factory is $780,000.
3. Determine market
According to analysis the most happening and adventures market is selling of
property for the residential purpose.
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4. Determine Valuation technique
The best approach for the proper valuation technique is market approach
because there are many observable inputs in terms of property market selling
prices (
Warren Ruppel, 2017..pp 37).
On the separate assets factory has o fair value and the fair value of land is based
on the market price of the similar property of $900,000.
The high and best use of the land with the calculation comparison:
As the vacant block the value of the land for the purpose of resident, which
includes the factory at the 0 fair value and,
1. If the factory is develop for the industrial used which also includes the
factory as an ongoing asset.
High and best use is the higher of below mentioned two values. If
1. Is chosen, then the fair value of the factory is zero and no depreciation will
be calculated.
2. Is chosen, then it will be required to calculate the fair value of the factory
separate from the fair value of the land for depreciation on the factory
(
Abbas Ali Mirza, 2015..pp 102). If should be argue with the below
mentioned formula-
Fair value of the factory = Difference between the fair value of the land for
residential purposes - Fair value of the combined assets
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