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Financial Analysis and Management Accounting - Doc

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Added on  2020-10-05

Financial Analysis and Management Accounting - Doc

   Added on 2020-10-05

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FINANCIAL ANALYSIS ANDMANAGEMENTACCOUNTING
Financial Analysis and Management Accounting - Doc_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................11. Opinion on basis of relevant accounting treatment of every transaction.................................12. Implications of each choice on basis of above transactions....................................................23. Critical analysis of fair value and historical value of accounting methods.............................4CONCLUSION................................................................................................................................5REFERENCES................................................................................................................................6
Financial Analysis and Management Accounting - Doc_2
INTRODUCTIONFinancial analysis is considered as process for purpose of evaluating businesses, budgets,projects along with entities on basis of finance for identifying suitability and performance.Generally, financial analysis is used for analysing that business entity is solvent, stable profitableor liquid enough for warrant a monetary investment. However, management accounting isreferred as presentation of analysing business activities to internal management for purpose offacilitating decision making. The present report will give details with context of ComboApplications as it shows critical comment on appropriateness of fair and historical valuereporting methods on basis of IAS 16 and IAS 36. Further, this will also represent information onbasis of IAS 28 and IAS 39 as well along with implications of each choice on Statement of profitand loss and the financial statement.1. Opinion on basis of relevant accounting treatment of every transactionThere was purchase of building for £500000 in municipality on Tower hamlets and as perannouncement of council there was creation of rubbish dump in this building. After revaluationfrom real estate agent it was valued at £200000 as this transaction will be treated as per IAS 36impairment of Assets. It will ensure about asset which are carried at amount which could not berecoverable as it only applies to land, machinery, equipment, goodwill, buildings, investment insubsidiaries, joint ventures and associates along with assets which are carried at revaluedamounts under IAS 38 and IAS 16. These impairments' loss will be recognised as expense unlessit is related to asset revaluation with decrement. The amount after recognition of asset instatement of financial position after deduction of accumulated impairment losses anddepreciation (IAS 36 — Impairment of Assets, 2018).In the similar aspect, company has bought shares of oil company Petroleum for £2000000and fall in prices has led plunge in shares in approx 4 months. As per IAS 28 Investment inassociates would be outlining accounting for investments. With this perspective, investor couldcreate significant influence as power for participating in operating and financial policy decisionsof investee with limited exceptions which could be accounted with application of equity method.In case, investor's share of loss of any associate is exceeding or equal to interest in associate theninvestor would be discontinuing for recognising share of further losses. On basis of statement offinancial position, this investment will be held through venture capital or mutual fund withcontext of initial recognition designated in IAS 39. It will be measures at fair value with1
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