Company Accounting

Running head: COMPANY ACCOUTING
Company Accounting
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Author’s Note:

1COMPANY ACCOUNTING
Table of Contents
In Response to Question 1..........................................................................................................2
In Response to Question 2..........................................................................................................2
In Response to Question 3..........................................................................................................3
References..................................................................................................................................8

2COMPANY ACCOUNTING
In Response to Question 1
The balance of a company is mixture of variety of assets where assets are reported at
historical costs and as well as at fair value. It depends on the approach and the accounting
regulations standards followed by the company. It is generally good if the balance sheet
represents economic reality whereby assets and liabilities of a company are reported at the
fair value (Goncharov, Riedl & Sellhorn, 2014). On the hand it is also important to note that
the non-current or the fixed assets of the company are not meant for sale or neither are there
market value relevant to the company as the purpose of the asset is increasing productivity
level of the company. On the other hand side like there are various other assets and liabilities
of a company which are acquired or invested by the company for the purpose of trading (Jana
& Marta, 2014). The accounting regulation do require that companies should report fair value
of these volatile assets and liabilities and are reported at fair value (Yao et al. 2015).
Depreciation is accounted or charged representing a fall in the productivity capacity of an
asset. Even if the fair value comes into play the depreciation would be charged because the
life of the asset and the capacity of the asset does not changes however gain or loss arising
from the revaluation of asset may be shown as per the accounting standard followed by the
company. Thus, it depends upon the classification and nature with which the company has
taken into account for the purpose of the valuation (Palea, 2014).
In Response to Question 2
The assets of the company is diverse in nature and each of the asset has its own
characteristics and classification. Assets such as land and buildings are generally classified by
the company as held till maturity (Strouhal, 2015). However, it is important that for doing
impairment of assets the life and the fair value of the assets is known in case of land and
building the value and the life of the assets is generally not available. Land and Buildings are