Corporate Accounting Question Answer 2022

Running head: CORPORATE ACCOUNTING
Corporate Accounting
Name of the Student:
Name of the University:
Author’s Note

CORPORATE ACCOUNTING
1
Table of Contents
Answer to question 1.......................................................................................................................2
Sub part (a)..................................................................................................................................2
Sub part (b)..................................................................................................................................2
Sub part (c)..................................................................................................................................3
Answer to question 2.......................................................................................................................3
Answer to question 3.......................................................................................................................4
Sub part (a)..................................................................................................................................4
Sub part (b)..................................................................................................................................4
Sub part (c)..................................................................................................................................5
Reference.........................................................................................................................................6

CORPORATE ACCOUNTING
2
Answer to question 1
Sub part (a)
The provisions which are stated under IFRS 13 effectively states the policies and
procedures which is related to fair valuation of assets and liabilities of a business and the
disclosures which are related to the same. The fair value of the assets and liabilities are defined
in the basis of the current value of the assets or liabilities associated with the business. The net
realizable value of the assets and the amount which a business needs to pay for its liabilities
would be considered as the fair value of the assets and liabilities of the business. The standard
further states that there should be an active market for the object and the best price quote needs
to be considered for the purpose of valuation (Aasb.gov.au., 2019). The standards also emphasize
on the important of identification of market participants and also is beneficial for the market. As
per para 22 of AASB 13, clarification is provided in terms of measurement of fair value, the
identification of market participation is important and assumption should be taken accordingly.
Sub part (b)
The market participants assumption needs to be undertaken in case an entity decides to
measure their assets and liabilities at their fair value. The expected cash flow and suitable
discount rates are also to be considered for measuring the value of the assets of the business. As
per the requirement of Appendix A of AASB 13 risks is to be assumed for considering the
market participant concept for fair valuation of the assets and liabilities of the business (AASB,
2015). It is for these reasons that the natural reaction of the market participants need to be
considered while applying the fair value techniques in measuring the assets and liabilities of the
business.