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Advance Financial Accounting Report

   

Added on  2020-05-16

10 Pages2715 Words43 Views
Running head: ADVANCE FINANCIAL ACCOUNTINGAdvance Financial Accounting Name of Student:Name of University:Author’s Note:
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ADVANCE FINANCIAL ACCOUNTING1Table of ContentsIntroduction......................................................................................................................................22.Benefits and challenges of using historical cost and fair value accounting for PPE andintangibles........................................................................................................................................33.Identification of valuation practices for PPE and intangibles.................................................44.Rationale for valuation practices for PPE and intangibles not consistent across the threecompanies........................................................................................................................................55.Opinion on the free choice between historical cost and fair value accounting for PPE andintangibles........................................................................................................................................6Conclusion.......................................................................................................................................7Reference List..................................................................................................................................8
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ADVANCE FINANCIAL ACCOUNTING2IntroductionThe learnings of the study intend to find the measurement with the concepts associated tothe historical and fair value measurement of costs. The study has encompassed several aspectsassociated to the benefits of the “historical” and the “fair value accounting system”. The differenttypes of the other facets of the study is abet to discuss the various concepts for the identificationof PPE and intangibles. The learnings have identified whether the estimate “practices for PPEand intangibles” are consistent with the different types accounting standards followed in othercountries. This aspect of the study is evaluated in terms of the selection of three companies basedon “New York Stock Exchange”, USA, “Australian Securities Exchange” and London stockexchange.1.Measurement of concepts in relation to “historical cost and fair value accounting”The application of “IFRS 13 Fair Value Measurement” is applicable to the IFRSs topermit the “fair value measurement” and the exposures which offers a single “IFRS framework”for measuring costs. The fair value consideration of the exit price notion considers “fair valuehierarchy” which results in market based factors rather that the measurement of the specificentities. The original issue of “IFRS 13” was done in May 2011 and is applicable to the annualperiod commencement or after 1st January 2013 (Bizfluent. 2018).There have been significant types of the differences which pertain to the assessment ofthe elements consisting of non-current assets as per various bookkeeping models usedworldwide. In some of the historical cost accounting standards, asset revaluation is not permitted.For instance, “US GAAP, PRC GAAP, German GAAP, JP GAAP and French GAAP” do notallow revaluation of the assets. In addition to this, “Spanish PGC” does not reflect therevaluation model either, however the fixed assets may not be values in terms of historical costmethod as there have been specific laws identified which voluntarily reflect on the updatedvalues for the inflated assets (Learn Accounting: Notes, Procedures, Problems and Solutions.2016).On the contrary country such as Australia contemplates with the revaluation model whichin compliance to IFRS 13 and IASB model. This consider the models of both “historical cost and
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