GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements. Companies are expected to follow GAAP rules when reporting their financial data via financial statements. If a financial statement is not prepared using GAAP principles, be very wary! Therefore, you still need to be careful and review other financial reports which can be altered. Convergence means that the U.S. Financial Accounting Standards Board (FASB) and the Independent Accounting Standard-setting Body (IASB) would continue working together to develop high quality, compatible accounting standards over time.
Forecasting Financial Statements of Apple Inc. Natalia Andruszkiewicz International American University FIN 500: Financial Management Abstract In this paper will show the Forecasting Financial Statements of Apple Inc. we will be able to see why Forecasting Financial Statements are important for the company and investors. Key words: financial statement, forecasting statement, Apple Inc., investors. The use of historic data to focus the heading of future trends. Forecasting is utilized by organizations to decide how to allot their financial plans for a forthcoming time of time. This is regularly taking into account interest for the merchandise and administrations it offers, contrasted with the expense of creating them.
The existence assertion is to make sure that the client and accounts exist, the completeness is to make sure that all of the balances are recorded, and the valuation is to make sure that the balances are recorded at the correct amount. It is important that the auditor obtains a confirmation from a third party for the information in accounts receivables. After communicating and obtaining the information, the auditor is to evaluate the information (SAS No. 67, AU Section 330.11). The audit objectives auditors use to perform year-end sales cutoff tests are to determine if the information they obtained by the confirmation reduces the audit risk level.
Keywords: Sources of GAAP, Consolidation of Variable Interest Entities, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and Disclosure of Subsequent Events Week One Homework Assignment The four most recent FASB Accounting Standards Codification amendments will be summarized within this text. A description of each Amended Codification Standard will be given. In addition, the impact that it has on the existing authoritative accounting literature. The four most recent issuances refer to Change in Sources of GAAP for Public Companies, Consolidation of Variable Interest Entities, Accounting for Transfers
Lessees are obligated to recognized assets and liabilities for all leases which would eliminate the operating lease accounting. Lease expense would be recorded at the being of the lease agreement which will include interest expense and the amortization. How do the IFRS criteria for lease classification differ from those under US GAAP? Under both the IFRS and the US GAAP both are able to distinguish between a finance lease and an operating lease. Under the US GAAP a lease must meet one of the four requirements to be classified as a finance lease by the lessee: The lease must transfer owner ship at the end of the lease term, a) The lease must contain a bargain purchase option, b) The lease must equal 75% or more of the estimated economic life of the leased property, c) The present value of the beginning of the lease term of the minimum lease payment equal or exceeds 90% of the excess of the fair value of the leased
How do Equator Principles Financial Institutions categorise projects when implementing the Equator Principles? Q9. What steps do Equator Principles Financial Institutions take to ensure the Equator Principles are followed? Q10. Do Equator Principles Financial Institutions really have to change their business processes to ensure robust implementation?
FASB There is also the update of Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. This update is issued by the board to give clarity and lessen the variety in practice and the complication when the guidance in topic 718 is applied. An entity may alter the terms of a share-based payment award for a lot of diverse reasons, and the effect of the change can significantly differ. The FASB defines term modification currently as “a change in any of the terms or conditions of a share-based payment award.” Stakeholders noticed that the meaning of the term modification is broad and different entities interpreted it their own way. Some entities assess if a change to the terms of an award is substantive.
The analysis in this paper will consist of the examination two companies, Caribou Coffee which operates in the United States (US) and Fazer which operates in Europe, with regards to the different accounting standards used to prepare their respective financial statements. It will continue with a discussion of the accounting standards used by each company, both internally and by their external auditors. And finally it will analyze and comment on the differences in the annual statements, provide a review of some of the specific differences in content and format, and work to determine it the financial statements are comparable. After reviewing annual financial statements the examination will continue looking to see which one of the two companies is the most profitable, comparing the growth of revenue versus income over time and between the two companies, and finally exploring the difference in profitability between the two companies. GAAP and IFRS Accounting Standards US Financial Accounting Standards Board (FASB) promulgates the Generally Accepted Accounting Principles (GAAP) and the International Accounting Standards Board (IASB) promulgates the International Financial Reporting Standards (IFRS).
In contrast, if there is not active market, market value accounting requires the use of estimation subject to uncertain assumptions, personal judgment, and subjective information about future values, such as discount rates and allowance for doubtful accounts. FASB has broadened the framework and disclosure practices to increase the reliability of market value accounting. However market value accounting is still emphasize the role of managerial judgment in the valuation process. Besides, market value accounting offers management the opportunity to manipulate the bottom line. So it’s less reliable than historical costs.
The Components for Aggregate Demand are C (consumption)+ I (income)+ G (government spending)+ (X-M) (net exports) and a change in the components of Aggregate demand will cause a shift of the curve. Fiscal policy is a type of economical intervention where the government injects its policies into an economy in order to either expand the economy’s growth or to contract it. By changing the levels of spending and taxation, a government can directly or indirectly affect the aggregate demand. Fiscal policy can be used in order to either stimulate a sluggish economy or to slow down an economy that is growing at a rate that is getting out of control. There are two types of Fiscal policy put in place to alter the level of aggregate demand; Expansionary fiscal policy and Contractionary fiscal policy.