Current Developments in Accounting Thought : Doc

Running head: CURRENT DEVELOPMENTS IN ACCOUNTING THOUGHT
Current Developments in Accounting Thought
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Table of Contents
Solution to question 1.................................................................................................................2
Solution to Question 2:...............................................................................................................7
Introduction............................................................................................................................7
Proposal..................................................................................................................................8
Debate under consideration....................................................................................................9
Significance of the Proposal.................................................................................................11
Conclusion............................................................................................................................11
References................................................................................................................................12
Appendix..................................................................................................................................15

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Solution to question 1
Presentation of the news article
A copy of the selected news article is attached herein the appendix section of the assignment.
Recognition, explanation and discussion of significant issues elucidated in news article
The study at hand takes into count the report published on 30 April, 2018 on “ESMA
publishes 22nd enforcement decisions report”. The current article on The European Securities
and Markets Authority has necessarily published additional extracts from private database of
particularly enforcement decisions undertaken by particularly European national enforcers. In
essence, this batch necessarily deals with definite decisions relatable to standards namely IAS
3, IFRS 5, IAS 8/IAS 21/IAS 29, IAS 7, IFRS 3/IFRS 13/IAS 28, IAS 32, IFRIC 17, IAS 1,
IFRS 10, IAS1/IAS36, as well as IAS 38 ("ESMA publishes 22nd enforcement decisions
report", 2018). As such, it can be hereby stated that ESMA is pronouncing specific extracts
from the private database.
The most important matter under consideration is the statement of ESMA connected to
diverse information from private database. The information is related to enforcement
decisions regarding monetary statements. Particularly enforcement decisions on pecuniary
assertions has the objective of strengthening administrative convergence and delivering
varied issuers along with users of financial assertions with pertinent information on the
suitable implementation of the International Financial Reporting Standards (Schneider,
2015). Further, the selected article explicates publication of chosen enforcement decisions
that informs regarding participants of the market about which treatments of accounting of
European enforcers might possibly consider compliance with the accounting standard IFRS.
Different accountings standards take into consideration are necessarily within the accepted

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range of the ones allowed by IFRS (Cortese, 2013). Therefore, the chief issue that can be
regarded in this context include comprehending rationalization behind definite decisions that
can lead the way towards unrelenting application of standard of accounting of IFRS
mentioned in EEA.
The selected article under consideration mentions that European national enforcers review as
and track financial pronouncements (ESMA publishes 22nd enforcement decisions report,
2018). The pronouncements are declared by different issuers with definite securities that
necessarily traded on a controlled market in Europe and the ones who prepare pecuniary
assertions as per International Financial Reporting Standards. In addition to this, this standard
takes into account examination of compliance with IFRS as well as other applicable
necessities of reporting counting pertinent national regulation ("ESMA publishes 22nd
enforcement decisions report", 2018).
In addition, the selected piece of the study handles assessment of degree of compliance the
regulations of IFRS along with applicable necessities of reporting counting national
directives/rules. This helps in promoting suitable application of the standards of IFRS
(Hines, 1989).
Again, the current article also elucidates that publication of decisions on enforcement is
formulated to inform different participants of the market regarding the accounting treatments
that European enforcers might perhaps take into account as conforming to the standard IFRS
(Hoogervorst & Prada, 2015). This examines whether different treatments are considered as
being with the established range of the ones permitted by the IFRS. Again, ESMA also takes
into account the publication of specific decisions along with the rationale behind them, shall
contribute towards the consistent implementation of the standard IFRS in specifically the
European Union (IFRS Foundation, 2015a).

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Deconstruction and evaluation of issues reported in the news article
As presented in the article, there are topics that are covered in the current batch of dig outs,
covering the specific period of August 2016 to particularly July 2017 ("ESMA publishes
22nd enforcement decisions report", 2018). The article mentions that the topics included in
this segment are as presented one by one below.
The standard IFRS 5 that is on the Non-Current Assets Held for Sale and Discontinued
Operations covers the topic Classification of an asset that is not anticipated to be particularly
marketed within a period of one year. This is included in this piece under consideration. In
normal terms, this lets in analysis of assets or else disposal groups that are held for sale are
essentially not depreciated. This is enumerated at the lower value of particularly the carrying
amount as well as fair value subtracting the cost to market, and is presented individually in
the pronouncement of firm’s financial position (IFRS Foundation, 2018a). This segment
takes in specific disclosures that are necessary for the discontinued functions as well as
disposals of different non-current assets. The standard IAS 7 on “Statement of Cash Flows”
covering the topic of Presentation as well as disclosure of limited balance of cash is covered
under the topic ("ESMA publishes 22nd enforcement decisions report", 2018). Also, IAS 32
on “Financial Instruments: Presentation” containing the perpetual notes categorised as
liabilities are presented in this segment. Also, IAS 1 highlighting “Presenting of Financial
Statements” and IAS 36 reflecting Impairment of Assets helps in replicating disclosures of
suppositions regarding diverse quantitative commodity prices that have considerable risk of
ensuing in material adjustments to particularly carrying amount (Peach, 2015).
Furthermore, the current article also illustrates IFRS 3 on “Business Combinations”, IFRS 13
on “Fair Value Measurement” and IAS 38 on Intangible Assets reflects purchase price

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allocation of a particular group of diverse acquired assets ("ESMA publishes 22nd
enforcement decisions report", 2018). Moreover, IFRIC 17 that is on distribution of diverse
non-cash assets to different owners explains demerger as well as distribution of a particular
segment to the shareholders of the issuers. The current article also bears mention about IAS 1
on Presentation of Financial Statements that expounds in detail presentation of various
revaluation losses of different assets utilized in operating actions.
In addition to this, it can be hereby said that the current article mentions about the standard of
accounting IAS 10 that is on Consolidates Financial Statements. This refers to acquirement of
power over a specific investee following a definite tender offering. This article also bears
mention about the accounting standards namely IAS 8 on particularly Accounting Policies,
Accounting Changes in different estimates as well as Errors includes inadequacy of
exchangeability of foreign currency as well as hyperinflation ("ESMA publishes 22nd
enforcement decisions report", 2018). Therefore, this article covers this specific standard and
prescribes specific criteria for selecting and altering approximations and replicating
corrections of previous period errors. In essence, this standard calls for the need of
conformation with particularly IFRS that are pertinent to particular state of affairs of the
business entity. This current article mentions about IAS 21 replicates about “The effects of
changes in particularly foreign exchange rates” and IAS 29 on particularly “Financial
Reporting in Hyperinflationary Economies” ("ESMA publishes 22nd enforcement decisions
report", 2018). Also, the current article replicates IAS 38 on “Intangible Assets” and this
covers amortisation of different content rights for specifically films along with television
programs.
Identification of a range of pertinent accounting theories applicable

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As rightly indicated by Hoogervorst & Prada (2015), Positive theory mentions about
materialization, adjustment, abolishment along with execution of specific directive of a
sector. Control put into effect by business enterprises, consumer interests together with
interfering self interest of authoritarian agency call for explaining behaviour of regulator.
Diverse interest groups of mostly consumers, manufacturers together with related interest
groups can compete with each other for exerting political control (). Essentially, this
institutional structure can be related to the present article on enforcement counting diverse
regulations. This is said to exert impact on enterprises functioning in different sections,
welfare of consumers together with regulators.
In addition to this, the public interest theory can also be related to the present study of the
piece under deliberation. In essence, this is a particular theme that can be linked to the
concept associated to welfare (Hines, 1989). Particularly, this presents theoretical legalization
for directive. The premise also talks about that market featured by specific character might
perhaps be unproductive ad might possibly experience malfunction that essentially can be
rectified by using particular regulations.
In effect, public interest theory on the groundwork of significant hypothesis concerning the
character of diverse regulators, utilization of complete information can ascertain fitting
enforcement. Essentially, this theory also refers to enforcement of diverse directives as well
as rules that are crucial for welfare. Therefore, this specific piece of writing under
consideration can be understood by utilizing public interest theory besides positive theory of
regulation.
Conclusion
The study under consideration expounds about certain news article on particularly publication
of enforcement decisions account of ESMA. Particularly, this notion aids in assessing

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decisions of enforcement of specific assertions with intent of reinforcing convergence of
management and delivering diverse issuers with relatable information on fitting execution of
the regulations of the standards of IFRS.
Solution to Question 2:
Comment Letters
Copy of the comment letters are herein attached in the appendix segment of this task. The
present proposal can essentially be correlated to specific recommendations on the subject of
accounting standards along with institution of updates regarding share compensation of as per
the topic number 718.
Outline of what the exposure draft is transforming
The current report presents assessment of development of specific proposals announced by
the Financial Accounting Standards Board (also simply referred to as FASB) with regard to
Share based payment accounting of employees that is necessarily relatable to the
compensation for stock (Proposed Accounting Standards Update—Compensation—Stock
Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment
Accounting, 2017).
Assessment whether exposure draft is introduced as per public interest
Development or upgrading of sorts of procedures of accounting is crucial. Standards or in of
accounting refers to specific thoughts, knowledge and is essentially significant for enterprises
of varied sections to participate in processes of proposing specific comments. In effect,
effectual feedback can in essence be acquired on definite proposals and thereby public

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interest can enhanced (IFRS Foundation, 2015b). In the whole, relatable questions linked to
the alterations are delivered in models presented in FASB - Financial Accounting Standards
Board (Peach, 2015). Basically, this is a accountability of enterprises to propose their
solutions to the particular questions slated in and illustrates concerning assent/disagreement.
Particularly, there are many questions that are sketched and each and every prescribed
question unavoidably have to to be answered in the interest of the entire public.
It can be hereby noted that there are essentially four respondents presenting their judgements
based on the notions of the exposure draft. As such, the report helps in assessing and
explaining the fact that surplus tax advantage along with identification of deficiency
particularly within the purview of the income statement cannot be initiated. Therefore, a
symmetrical equity approach necessarily needs to be integrated for lessening the volatility of
cost within particularly the income statement.
Introduction
The current proposal can be associated to definite recommended accounting standards and
maintenance of updates on specifically stock compensation as per the topic numbered 718.
The particular accounting standard that is taken into consideration includes “Improvements to
Non-employee Share-Based Payment Accounting" (Peach, 2015). However, it can be hereby
observed that upgrading various guidelines mentioned in “Improvements to Non-employee
Share-Based Payment Accounting" is obligatory for reducing the cost as well as intricacies
that are witnessed whilst maintaining and developing efficacies of the data that are presented
by the pecuniary declarations.
The current study under consideration takes into account four different respondents
from all the comments made available from the official website of particularly the board of
accounting. It can be observed that critical evaluation of four different comments from

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particularly the respondents can be influential in the process of assessment of standards on
accounting and help in getting a sketch of the issues considered. Again, the supplementary
objective is to understand the way implementation of this accounting guidelines can augment
overall accounting standards (Peach, 2015). Also, the current report also has the intent to
evaluate all the comments including comments of approval as well as disagreements for
arriving at conclusive outcome with regard to precision of accounting standards.
Proposal
It can be hereby observed that accounting of non-employee payment of share is crucial as
preservation of the sentiments of non-employees of business concerns is important for
effectual functioning of the business corporation. Essentially, a strong and enduring
association among different corporations and their members of staff helps in development of
an effective business atmosphere (Hines, 1989). Therefore, developments in these sorts of
procedures of payment of accounting are necessary.
Fundamentally, the accounting standard prescribes diverse thoughts along with vivid
knowledge and exerts influence on the business concerns of diverse sector to partake in the
process of putting forward their comments (Hines, 1989). It is in this way effectual feedback
can be acquired on the proposals and public interest can be enhanced. In itself, questions
relatable to the transformations are presented in the form of FASB and it is a liability of the
business concerns to answer the questions presented in the form and talk about their
disagreement or assent (Cortese, 2013). In essence, there are several questions that are
presented and each and every question has the need to be answered in the public interest.
Views presented in comment letters highlighting areas of agreement/disagreement
It is elucidated in the report that the feedback gathered from diverse participants can
be taken into consideration in a bid to acquire knowledge as regards agreements or

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disagreements regarding transformations suggested therein the guidelines of accounting
standards. The feedback obtained from different partakers can be taken into account in this
regard:
Visa Inc
The business concern Visa Inc is a leading firm operating in the arena of technology of online
disbursements and intends to augment the procedure of payments across the entire world. In
addition to this, the business concern under deliberation also acknowledges the opportunity to
provide suggestions regarding developments that are proposed by the Financial Accounting
Standards Board. Essentially, it can be observed that business concern responds to each and
every questions presented in the exposure draft. Also, it can be observed that the business
concern provides assent to the suggestions presented by the board contradicting all the
proposals of the additional tax advantages as well as deficiencies in the statement of income.
Essentially they have faith in the proposal of FASB and believe this proposal might aid in
mitigation of the intricacies for business organization (Cortese, 2013). However, this might
perhaps enhance the cost volatility related to income tax.
Heiskell and MacGillivray and Associates
This business organization is associated to audit as well as accounting operations in
Australia and provide responses to definite inquiries related to the augmented as well as new
standards of accounting. Essentially, they assent to the case of termination of particularly PIC
accounting pool. As such, this is said to lessen expends of the firm along with intricacies
associated to accounting. Also, the company expresses assent to the associated costs for
definite pay and that is incorporated in the declaration of income. In this manner the tax
advantages along with deficiencies are vital and need to be implemented (Peach, 2015).

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Additionally, the business concern also agrees to the fact that there is requirement for limiting
delays in the identification of the surplus benefit of tax.
Raytheon Company
This business concerns is a leading USA based firm operating in the segment of innovation
and technology and is well known for their technologically advanced offerings in the area of
defence, various equipments of security as well as software relatable to civil market across
the globe. This organization also makes great effort to develop an effectual corporate
governance. In itself, this company too responds to question numbered 2, question 3 and
question 5 presented in the exposure draft . It can be hereby witnessed that the corporation
places contradictory view and opposes with “Heiskell and MacGillivary and Associates”
concerning question 2 and say the opposite to the recommended procedures of the regulation
regarding identification of extra tax benefits as well as shortages of tax mentioned in
declaration of income. Contrarily, they also present the fact that FASB has the need to pursue
a structure in which all the advantages as well as shortages of additional tax are divulged in
particularly the equity (Peach, 2015). In essence, the business concern recommends use of
symmetrical approach of equity that in turn can present augmented outcomes
American Bankers Association
This is a definite firm where different partakers of all the banks operating in USA are present.
It can be observed that this business unit compliments the alterations suggested by FASB as
per developments presented in “Employee Share Based Payment Accounting”. Also, it can be
seen that this entity responds to all the questions and says the opposite to only one question
(IFRS Foundation, 2015).

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Application of theories to the comment letters along with justification
Public interest theory of mostly rules/directive illustrates on the whole the rules that have the
intent to shield and deliver benefit to the public at large. In effect, this theme can be related to
welfare that inevitably presents justification for specific rules. According to the theories, rules
of firms plus other economic factors lead towards promotion of interest of the public.
Particularly, in this context, suggestion for amendment has the aim to enhance financial
statements and reduce stress and work strain on mainly focused accountants. For that reason,
notion of public interest notion can be referred to be most effectual in this context since this
particular proposal also aims to protect interests and welfare of the public.
The current proposal can be said to be important in the segment of accounting system of
employee share based payment and this can necessarily enhance remuneration on the stock.
Essentially, the current proposal intends to augment development of financial assertions and
reduction of work pressure of different accounting professionals (IFRS Foundation, 2015).
Therefore, the theme of Public interest theory that is an economic notion associated to
welfare delivering theoretical substantiation for the particular regulation can be considered as
the most effective theory in this regard.
Conclusion
Critical evaluation of the proposal presented by FASB with regard to accounting scheme of
share based payment of employee helps in understanding the fact barring one all other
respondents are in favour of the alteration in the proposal as regards recognition of surplus
advantages as well as deficiencies of tax in income declaration. Again, other proposals have
also been allowed by different respondents, however, this present proposal is not considered
since it might generate cost fluctuations in statement of income. Therefore, it is

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recommended that developments in this arena can augment state of affairs related to
development of accounting system of stock based payment.
References
Cortese, C. L. (2013). Politicisation of the international accounting standard setting process:
evidence from the extractive industries. Journal of New Business Ideas and Trends,
Vol. 11 (2), pp.48-57.
Deegan, C. (2014). Financial accounting theory (4th ed.). McGraw-Hill: Sydney.
ESMA publishes 22nd enforcement decisions report. (2018). Retrieved from
https://www.iasplus.com/en/news/2018/04/esma-enforcement-decisions
Hines, R (1989), "Financial accounting knowledge, conceptual framework projects and the
social construction of the Accounting profession". Accounting, ******iting and
Accountability Journal, 2(2), pp. 72-92.
Hoogervorst, H. & Prada, M. (2015). Working in the Public Interest: The IFRS Foundation
and the and IASB. Retrieved from http://www.ifrs.org/-/media/feature/about-us/who-
we-are/working-in-the-public-interest.pdf?
la=en&hash=1B548A5E42E34CB412FD38E1EB40879C7C16C7E7
http://www.ifrs.org/about-us/how-we-set-standards/
IFRS Foundation. (2015a). Exposure Draft ED/2015/3: Conceptual Framework for Financial
Reporting, May 2015. Retrieved from http://www.ifrs.org/-/media/project/conceptual-
framework/exposure-draft/published-documents/ed-conceptual-framework.pdf
IFRS Foundation. (2015b). Basis for Conclusions Exposure Draft ED/2015/3: Conceptual
Framework for Financial Reporting, May 2015. Retrieved from

15CURRENT DEVELOPMENTS IN ACCOUNTING THOUGHT
http://www.ifrs.org/-/media/project/conceptual-framework/exposure-draft/published-
documents/ed-conceptual-framework-basis-conclusions.pdf
IFRS Foundation. (2018a). Conceptual Framework for Financial Reporting. Retrieved from
http://www.ifrs.org/issued-standards/list-of-standards/conceptual-framework/
Peach, K. (2015, 4 December). Australian Accounting Standards Board: IASB ED/2015/3
Conceptual Framework for Financial Reporting. Retrieved from
http://eifrs.ifrs.org/eifrs/comment_letters//50/50_6012_KrisPeachAustralianAccountin
gStandardsBoard_0_AASB_Comment_Letter_CF_EDs_final.pdf

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Appendix
Appendices 1
Source: https://www.iasplus.com/en/news/2018/04/esma-enforcement-decisions

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Appendices 2

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