Accounting Theory: Assignment

Running head: ACCOUNTING THEORY
Accounting Theory
University Name
Student Name
Authors’ Note

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Table of Contents
Solution to Question 1:...............................................................................................................3
Solution to Question 2:...............................................................................................................8
Reference..................................................................................................................................14
Appendix..................................................................................................................................17

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Solution to Question 1:
Presentation of the news article
A copy of the news article is attached in the appendix of the task.
Identification, description and discussion of important issues presented in news article
The study particularly at hand considers report declared on 30th April during the year 2018
titled “ESMA publishes 22nd enforcement decisions report”. Essentially, this article taken
into account the European Securities as well as Markets Authority and publishes
supplementary extracts from diverse private data bases of specifically enforcement decisions
that are particularly undertaken by national enforcers of Europe (Cao et al., 2015).
Particularly, this specific group handles decisions associated to different accounting standards
that include IAS 36, IFRS 10, IFRS 5, IFRS 3 and IAS 29 among many others.
The primary matter under consideration is the pronouncement of ESMA related to diverse
extracts from diverse private data sources of specifically enforcement decisions on monetary
statements. There is the issue of understanding the extent to which this can strengthen
administrative convergence and present different issuers together with users of pecuniary
information pertinent financial information on appropriate application of the regulations
stipulated under the International Financial Reporting Standards (Ho et al., 2015). in addition
to this, the selected article expounds publications of selected enforcement decisions that can
inform market participants about which accounting treatment of mainly enforcers of Europe
and this might probably take into consideration conformation with accounting pattern IFRS.
Diverse standards of accounting essentially considered are particularly within the purview
along with range of particularly the ones permitted by the IFRS (Henderson et al., 2015).
Thus, the primary issue that can be considered in this regards include understanding the

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justification behind the specific decisions that can direct the way towards persistent
application of standard or regulation of IFRS stated in particularly the EEA. The article taken
into account states enforcers of the Europe of specific financial statements analyse and
monitor financial declarations (Di Pietr et al., 2016). In essence, the declarations are
mentioned by diverse issuers with specific securities that are normally traded on a guarded
market located in Europe and specifically the ones who arrange financial statements
according to the IFRS.
Furthermore, the selected article of the study deals with examination of degree of
conformation with the standards of IFRS together with applicable requirements of reporting
including national directive. ESMA also formulated a secret database of specifically
enforcement decisions undertaken by particular enforcers of Europe as a basis of information
to foster appropriate implementation of IFRS standards. Also, the article at hand also explains
publication of specific decisions on particularly enforcement is designed to inform diverse
partakers of the market concerning treatments of accounting. This article includes
examination of whether different accounting treatments can be considered as being with the
recognized range of the ones allowed by the standard IFRS. In addition to this, ESMA also
considers declarations of particular decisions together with purpose behind the same (Hodges,
2015). Thus, this aspect can help in contributing towards consistent execution of the standard
IFRS in particularly the European Union.
Deconstruction and evaluation of issues reported in the news article
As presented in the selected news article, diverse topics are covered in the present group. The
standard included IFRS 5. This is necessarily on the Non-Current Assets that are essentially
held sale as well as discontinued operations covering the subject matter of classification of
asset (Nobes & Stadler, 2015). In essence, this is not expected to be marketed with the

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specific period of 1 year. In essence, this subject matter can be included in this specific piece
of writing under consideration. Particularly, in standard context, this permits evaluation of
assets otherwise disposal batch that are necessarily held for sale are necessarily not
depreciated (Davis et al., 2015). In itself, this is calculated at comparatively lower value of
specifically the carrying amount along with fair value deducting the cost borne to the market.
IAS 7 focussing on the statement of flows of cash is included in this article. This covers
presentation as well as disclosure of restricted cash balance. Also, topic involved in the study
also includes IAS 32 on particularly Financial Instruments that stresses on presentation. This
study therefore highlights perpetual notes that can be classified as liabilities and are presented
in this particular section (Brown et al., 2014). Additionally, IAS 1 is also covered in this
batch emphasizing presentation of financial statements. Also, IAS 36 replicating Impairment
of Assets aids in reflecting disclosures on particular assumptions concerning different
competitive prices that have substantial risk of resulting in material adjustments to specific
amounts of carrying (Correia, 2014). IFRS 3 is covered in the study on Business
Combinations, IFRS 13 on mainly fair Value enumeration and IAS 38 on particularly
intangible assets reflecting price of purchase assignment of a specific group of different
accumulated assets. Furthermore, the IFRS 17 replicates distribution of different non-cash
assets to varied owners explaining demerger along with appropriate distribution of specific
section to shareholders of issuer. In addition to this, IAS 1 reflecting Presentation of Financial
Declaration explicates presentation of different loss of revaluation of diverse assets used in
functioning activities (Kim & Ouimet, 2014). Further, IAS 10 concentrates on consolidation
of financial statements. This particular sector indicates towards acquirement of authority over
a particular investee subsequent to particular offering of tender.
In addition to this, the current article also lists IAS 8 that reflects aspects of the accounting
policies, changes in the policies as well as systems of accounting in different approximations

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along with error counting insufficiency of exchangeability of particularly foreign currency
along with hyperinflation. Thus, it can be hereby mentioned that the current news article
bears mention about particular standards and suggests criteria for selection along with
alteration of estimations and reflection of rectifications of mistakes of prior period. IAS 21
reflects about the influence of alterations in specifically rates of foreign exchange. Also, IAS
29 also concentrates on financial reporting in specifically hyperinflationary economies.
Again, IAS 38 reflects intangible assets and this necessary includes covering amortisation of
content rights for particularly movies together with television programs (Correia, 2014).
Identification of a range of pertinent accounting theories applicable
Positive theory of particularly regulation talks about emergence, modification, abolishment
along with institutional execution of sector specific directive. Influence exercised by business
concerns, consumer interests along with bureaucratic self interest of regulatory agency need
to be taken into consideration for illustrating regulator behaviour. Different interest groups of
particularly consumers, producers along with associated interest groups might perhaps
compete with one another for the purpose of political influence (Brown et al., 2014). This
institutional framework can be associated to the current article as this article on enforcement
including various regulations necessarily exerts influence on Business Corporation operating
in different segments, interests of consumers along with regulators.
Again, the public interest theory can also be associated to the current study of the article
under consideration. Essentially, this is a specific notion that can be associated to the notion
related to welfare (Brown et al., 2014). This delivers theoretical validation for regulation. The
theory also mentions that market characterised by specific features might be inefficient ad
might perhaps experience failure of the market that necessarily can be corrected with usage of
specific regulations.