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Accounting Theories and Issues - Doc

   

Added on  2021-05-31

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Running head: ACCOUNTING THEORIES AND ISSUESAccounting theories and issuesName of the StudentName of the UniversityAuthor Note
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1ACCOUNTING THEORIES AND ISSUESTable of ContentsIntroduction:...............................................................................................................................2Discussion:.................................................................................................................................2Accounting standard guidelines and its compliance:.................................................................2Elements of employee benefits and their conformance:............................................................3Elements of contingent liabilities and their conformance:.........................................................5Legal and accounting issues:......................................................................................................9Conclusion:..............................................................................................................................10Reference list:...........................................................................................................................12
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2ACCOUNTING THEORIES AND ISSUESIntroduction:The report is prepared for evaluating the financial statements of company foranalyzing its compliance with the accounting standard and the guidelines that it follows whilepreparing the financial statements. Punjab national bank is a financial service andmultinational banking institution of India that was established in year 1984. The brand imageof organization is its core image having more than 10 crore customers, consistent growingprofit, and strong CASA base, increased pace of digitalization, stable assets quality and lowcost of deposits (Hambrick et al. 2015). The main purpose of preparing report is to criticallyevaluate the effectiveness of the corporation for meeting the conceptual reporting frameworkof accounting. Purpose of accurate and fair disclosure of financial information is served bythe financial statements complying with the accounting standards (Aryee et al. 2015). In thisparticular study, analysis of financial statements is done by comparing the two areas offinancial statements that is contingent liabilities and employee benefits. Moreover, the reportalso intends to analyze the existing loopholes in the financial report of Punjab National bank.Later part of report demonstrates any legal or accounting issues faced by organization and theway it should be disclosed in the financial statements. Discussion:Accounting standard guidelines and its compliance:The financial statements of Punjab national bank is prepared according to theGenerally accepted accounting Principles in India and the regulatory norms and statutoryprovisions prescribed by Reserve bank of India, accounting standard and Banking regulationAct, 1949 (Power and Gendron 2015). Preparation of financial statements has been done
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3ACCOUNTING THEORIES AND ISSUESusing the accrual concept on an ongoing concern basis and according to accounting practicesand policies that is followed consistently. The two areas that have been selected from thefinancial report for comparison are employee benefits and contingent liabilities. Elements of employee benefits and their conformance:The particulars that are involved in the determination of employee benefits arediscount rate, attrition rate, expected return rate on plan assets and escalation rate in salary.Determination of discount rate is done in accordance with obligations as per para 78 ofAS15R by lining to market yield and date of government bonds. On other hand, at thebeginning period expectations of market form the basis of determining the expected rate ofreturn on planned assets. This helps in generating return over the entire life for relatedobligation. Furthermore, as mentioned in the paragraph 83-91 of AS15R, any estimates ofincreasing the future salary is taken into consideration by considering actual variations suchas seniority, promotion, inflation and other important factors. Attrition rate is determined bymaking reference to expected and past future experiences and it comprise of all types ofwithdrawal due to disability and other than death (Pnbindia.in 2018). Any changes in plan assets fair value are done by referring to AS-15 that ICAI issuesduring the year. This particular standard takes into account the fair value of plan assets inrelation to gratuity funds and pensions being interest that is accrued on investments, longterm benefits of employees that should be accounted for against the principal amount. Anychanges in contribution of employer to gratuity funds and pensions that represents presentvalue of obligation lower than plan assets fair valuation is credit to provision for employeesor payment to employees (Pnbindia.in 2018). The table below depicts the summarized position of employee benefits in accordancewith the accounting standard and in line with the accounting policy.
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