Advanced Financial Accounting Methods

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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..........................................................................................................................................4
Question 1..............................................................................................................................4
Question 2..............................................................................................................................5
Question 3..............................................................................................................................6
Question 4..............................................................................................................................7
References..................................................................................................................................9

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Part A
Question 1
In the business, there are financial statements which are prepared and in that the company
will be recording all the transactions and events in an adequate manner. There is a concept
known as true and fair view in accounting and it means that the financial statements are free
from any kind of material misstatement and all of the information that is presented is true
(Man and Ciurea, 2016). By them, the correct financial position of the business is ascertained
which helps the investors and others in the decision-making process.
All the directors are required to sign the declaration which states that the financial statements
are representing the true and fair view. Before signing the declaration it will be required that
they perform their own analysis of the financial reports and all of them shall be read by them
in a proper manner. The report which is provided by the external auditors and audit
committee will be taken into account and also the management report will be considered. The
information that is presented in the reports will be evaluated to identify their consistency
(Blankespoor et al., 2013). It will be checked that the accounting concepts and standards are
applied effectively and also proper treatments are made. All the required disclosures are made
and there is the correct recording which is made in accounts. They all will be evaluated in an
appropriate manner so that the correctness of accounting can be ascertained.
Question 2
All the assets which are involved in the business have various values that need to be taken
into account for various processes. The fair value of the asset is the value which has been
agreed by the buyer or the seller of the asset. It represents the value which is there for the
asset and incorporated in the financial statements.
There is the recoverable amount which shows the amount that is available for the asset and
that is ascertained with the help of various values. In this the highest of the value in use or the
amount which is derived after deducting the cost of sale from the fair value (Enahoro and
Jayeoba, 2013). There is the difference between the fair value and recoverable amount as in
the fair value the complete value which is available is taken into account whereas the