Financial Accounting: Investment Company Performance, IAS 36 Impairment of Assets, and Data Backup

This article discusses investment company performance, IAS 36 impairment of assets, and data backup in financial accounting. It covers the information that needs to be obtained by an investment company, the recognition of income, and the processes and procedures for impairment of assets. It also provides advice on data backup and prevention of virus attacks.

Running head: FINANCIAL ACCOUNTING
Financial Accounting
Name of the Student
Name of the University
Author Note

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FINANCIAL ACCOUNTING
Table of Contents
Answer to question 1.......................................................................................................................2
Part A...........................................................................................................................................2
Part B...........................................................................................................................................2
Answer to question 2.......................................................................................................................3
Answer to question 3.......................................................................................................................3
References........................................................................................................................................4

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Answer to question 1
Part A
The investment company performance results from income earned on its investments in
the form of interest and dividends and changes in the fair value of its investment while they are
held. The information’s about the company's holding that are to be obtained are:
1) Fair values of the shares that the investment company holds
2) The comparison of the management of the changes of the fair value investment by the
company to the changes in similar markets investment
3) Portfolio Turnover and related transaction costs such as Commission.
4) Information about risk in the portfolio
5) Interest and dividend earned.
5) The way the share value changed during the year.
Part B
As per the conceptual framework standard, an financial item that meets the definition of
income or expense liability or asset, should be recognized if it is feasible that any economic
benefits in the future connected with the item will flow or from the entity. Additionally, the item
has a cost of value that can be measured with trustworthiness (DeFond et al. 2018).
When it comes to the Conceptual Framework, the income is recognized in the statement
of income when increase in future economic benefits related to an increase in the asset or

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decrease of a liability has taken place that can be reliably measured. Appreciation of the fair
value of the investment securities does represent the increase of asset. For an investment
company this important component represents the performance.
Answer to question 2
IAS 36 impairment of assets guides with the processes and procedures procedures, which
a business can apply to, makes sure that the assets are carried no more than their amounts that is
recoverable. An asset would show a representation in such a way the amount is to be recovered
through the sale of the asset (Small, Smidt and Joseph 2017). In that case, the asset is saidto be as
impaired and IAS 36 requires the business to identify an impairment loss. It also specifies when
an entity shall reverse an impairment loss and prescribes disclosures in the given case the issue is
that the Australian company accepts the standards that would not fairly represent in this would
be advantageous if the company does not adopt the standard and avoid the situation(Yu and Xu
2015).
Answer to question 3
In given situation the board of directors of the company has destroyed all the details of
the non-current assets including the details of depreciation have been destroyed due to the recent
virus in the computer. The board of directors is facing the issue in choosing a solution regarding
the disclosure; hence, it is advice that there should a keep a proper back up of the data along with
the details of the depreciation so that even if they are lost it is easily recoverable (Picker 2016).
Moreover, steps are needed to be taken in order to prevent the virus from entering the computer
that consists of various informations. There is no need to change the accounting policy or
disclosure procedure.

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References
DeFond, M., Hu, J., Hung, M. and Li, S., 2018. The Usefulness of Fair Value Accounting in
Executive Compensation.
Small, R., Smidt, L. and Joseph, A., 2017. Impairment of assets-does it actually
matter?. Professional Accountant, 2017(30), pp.20-21.
Picker, R., Clark, K., Dunn, J., Kolitz, D., Livne, G., Loftus, J. and Van Der Tas, L.,
2016. Applying IFRS Standards. John Wiley & Sons.
Yu, C. and Xu, J., 2015, March. Research on accounting conservatism and investment efficiency
of IT enterprises: A perspective of impairment of assets. In Information Technology and
Applications: Proceedings of the 2014 International Conference on Information technology and
Applications (ITA 2014), Xian, China, 8-9 August 2014 (p. 113). CRC Press.