College Accounting Coach

What are the Accounting Treatment and give examples of Non-Adjusting Events After The Balance Sheet Date

slang — Sun, 28 Feb 2010 10:17:27 +0000

(a) For non-adjusting events, no adjustments are made to the amounts recognized in the financial statements. However the following disclosure should be provided namely (i) nature of the event and (ii) estimate of the financial effect , or a statement that such an estimate cannot be made. Note that non-disclosure could affect the ability of the users to make proper evaluations and decisions taken on the basis of the financial statements.

(b) Some examples of Non –Adjusting Events After The Balance Sheet Date are:

Announcing a plan to discontinue an operation.
Announcing or commencing the implementation of, a major restructing
Major purchase and disposals of assets
Expropriation of major assets by government.
Commencing major litigation arising solely out of events that occurred after the balance sheet date
Entering into significant commitments or contingent liabilities, like issuing significant guarantees
Destruction of a major production plant by a fire after the balance date
Major ordinary share transactions and potential ordinary share transactions after the balance sheet date
Abnormally large changes after the balance sheet date in asset prices or foreign exchange rates
Changes in tax rates or tax laws enacted or announced after the balance sheet date that have a significant effect on current and deferred tax assets and liabilities.

Please Explain What Are The Underlying Accounting Principles That At Least Need To Be Follow When Presenting Financial Statements under FRS 101

slang — Sun, 28 Feb 2010 10:12:16 +0000

Under FRS 101 ( Presentation of Financial Statements) it stipulates the minimum underlying accounting principles when presenting the financial statements:

Going concern- refer article
Accrual basis of accounting-refer article
Consistency of presentation- refer article
Materiality and aggregation – Each material class of item should be presented separately
Offsetting meaning that Assets and Liabilities are not to be offset

Comparative information whether it is narrative and or descriptive need to be disclosed to allowed the assessment of trends in financial information for predictive purposes. This disclosure is to enhance the inter-period comparability of information which assists users in making better economic decisions.

ICPAS to transform itself into a global professional accountancy body

slang — Wed, 27 Jan 2010 09:11:40 +0000

In the website of the Institute of Certified Public Accountants of Singapore (ICPAS), a POST-GRADUATE accountancy qualification that can be a passport to finance jobs worldwide has been proposed by a committee set up by the Ministry of Finance to look at ways of transforming Singapore into a global accountancy hub. The national accountancy body is the Institute of Certified Public Accountants of Singapore (ICPAS), which has 21,000 members, most of whom work in Singapore. The president of the institute is Dr Ernest Kan {Refer website: http://www.icpas.org.sg/}

According to research agency,Datamonitor, the Asia-Pacific accountancy market was worth US$30.8 billion (S$42.6 billion) last year, and will reach US$38.3 billion by 2013. Meanwhile,Singapore’s contribution to the market is 2.8 per cent. Australia, at 30 per cent, has the largest share, followed by China with 16.6 per cent and India at 16.4 per cent.

The proposal was announced by Minister in the Prime Minister’s Office and Second Minister for Finance and Transport, Mrs Lim Hwee Hua, at the Ernst & Young Entrepreneur of the Year award ceremony yesterday. It is part of a draft of recommendations contained in a consultation paper from the Committee to Develop the Accountancy Sector (CDAS).It has 10 key proposals. Some of key proposal are as follows:

The development of a post-graduate professional accountancy qualification. The committee said that in Australia, Britain and the United States, professional bodies have their own accountancy qualification programmes. Having a similar accountancy qualification will help Singapore develop as a centre for accountancy education. The qualification should be globally recognised and be internationally portable, meaning that it opens up access to work in global capital markets. Gaining the qualification can also allow non-accounting trained professionals a chance at a second career.
Developing a CFO certification programme that takes on board the evolving role of the chief financial officer. No longer is he just a ’scorekeeper’ who keeps track of the company’s results.
Many in the industry say a CFO now needs to go further and implement financial strategy which is in line with the business strategy. The ideal CFO should have a broad base of knowledge, encompassing the business, the industry, financial markets and internal functions
The setting up of an accountancy sector development fund to help the sector grow. The fund could assist local accountancy firms expand regionally or help implement technology that would make the sector more efficient. It could also attract global accounting conferences to Singapore.

The consultation paper is available on www.acra.gov.sg and the deadline for feedback is Dec 31.

FORMAT OF INTERIM FINANCIAL REPORTS(FRS 134)

slang — Mon, 25 Jan 2010 15:34:35 +0000

The interim financial statements (whether condensed or full set) include:

Balance sheet as of the end of the current interim period and a comparative balance sheet as of the end of the immediately preceding financial year
Income statements for the current interim period and cumulatively for the current financial year to date, with comparative income statements for the comparable interim periods of the immediately preceding financial year
Statement showing changes in equity cumulatively for the current financial year to date, with a comparative statement for the comparable year-to-date period of the immediately preceding financial year.
Cash flow statement cumulatively for the current financial year to date, with a comparative statement for the comparable year-to-date period of the immediately preceding financial year

[ SEE FORMAT IN ANOTHER ARTICLE]

What are the benefits of using product life cycle costing methodology or approach? (Part 4 of 4)

slang — Mon, 25 Jan 2010 03:28:25 +0000

BENEFITS FROM USING PRODUCT LIFE CYCLE COSTING

Some of the following benefits of using product life cycle costing are:

it results in earlier actions to generate revenue or to lower cost than otherwise might be considered
better decision should follow from a more accurate and realistc assessment of revenues and costs, at least within a particura life cycle stage
promote long-term rewards in contrast to short-term profitability rewarding
provides an overall framework for considering total incremental costs over the life span of a product.

Explain briefly what are the stages or procedures or steps involved in product life cycle costing. (Part 3 of 4)

slang — Mon, 25 Jan 2010 03:25:39 +0000

STAGES/STEPS/PROCEDURES OF PRODUCT LIFE CYCLE COSTING

Below are the steps/stages/procedures involved in product life cycle :

market research-identifies the products which the customers want, how much they are prepared to pay for it and how much quantity they intend buy
specification-provides detais such as required life, maximum permissible maintenance costs, manufacturing costs units required, delivery date, expected performance of the product
design-proper drawing and process schedules are defined
prototype manufacture-prototype may be used to develop the products and eventuall to demonstrate that it meets the requirements of the specifications
development-testing and changing to meet the requirements after the initial run as a product when first made rarely meets the specifications
toolings-tooing up for production means building a productionine, building expensive jigs, buying the necessary tool and equipments
manufacture-involves the purchase of raw material and components, use of labor to make and assemble the product
selling-stimulating and creating demand for the product when the product is available for sale
distribution-the product should be distributed to the sales outlets and to the customers
product support-the manufacturer or supplier should ensure that spare and expert servicing facilities are available for the entire life of the product
decommissioning-when a manufacturing product comes to an end, the plant used o build the product must be sold or scrapped

Describe the nature or characteristics of product life cycle costing? (Part 2 of 4)

slang — Mon, 25 Jan 2010 03:23:06 +0000

CHARACTERISICS OF PRODUCT LIFE CYCLE COSTING

The main characteristics of product life cycle costing comprises:

tracing of costs and revenues of each product over the several calendar periods throughout their entire life cycle
traces research and design and development costs and total magnitude of these costs for each individual product and compared with product revenue
report generation for costs and revenues.

What Is Product Life Cycle Costing ? (Part 1 of 4)

slang — Mon, 25 Jan 2010 03:20:13 +0000

WHAT IS PRODUCT LIFE CYCLE COSTING?

Product life cycle costing is a costing methodology or approach enabling the user to understand a long term picture of the life of a product in terms of:

profitability;
feedback on the effectiveness of life cycle planning and
cost data to clarify the economic impact of alternatives chosen in the design, engineering phase,etc.

Cost accountants view this methodology as a way to enhance control of the manufacturing costs at each stage of a product life’s cycle. It enables better visibility of the costs for each individual product and to compare the product revenue generated in later period.

FRS 134-INTERIM FINANCIAL REPORTING(Part 1/2)

slang — Sun, 24 Jan 2010 15:29:55 +0000

FRS 134: INTERIM FINANCIAL REPORTING

This FRS does not mandate which entities should publish interim financial reports, how frequently or how soon after the end of an interim period

FRS 134 defines interim period as a financial period that is shorter than a full financial period
An interim financial report can contains either a complete or condensed set of financial statements for the interim period
If an entity’s interim financial statements are in compliance with FRS, that fact should be stated.
Entities can either present (a) complete set of financial statements, or (b) condensed financial statements
For complete set of financial statements, they should comply with the requirements of FRS 101
Other factors to considered in preparing interim financial statements are materiality, recognition and measurement, accounting policies and seasonal, cyclical or occasional revenue and costs.
Interim financial reports can generally be half-yearly or quarterly. The report cover the current period year-to-date and comparatives

The minimum components of a condensed financial statement comprise the following:

Condensed balance sheet
Condensed income statement
Condensed statement of changes in equity or changes in equity
Condensed cash flow statements
Selected explanatory notes

As a minimum, the condensed financial statements should include:

Each of the headings and sub-totals included in its most recent annual financial statemets
Selected explanatory notes as required by the standard
Basic and diluted earnings per share on the face of the income statement

Additional line items or notes are included if they are significant in the overall context of the entity. If not included, the condensed financial statement report will be misleading.

The following are some of the items to be disclosed:

Statement of accounting policy changes
Explanatory comments about seasonality or cyclicality of interim operations
Exceptional items
Change in estimates
Issuances, cancellations, repurchases, resale and repayments of debt and equity securities
Dividend paid(aggregate or per share) separately for ordinary shares and other shares
Segment revenue and segment result
Material events subsequent to the end of the interim period
Changes in structure of the entity, including business combinations
Changes in contingent liabilities or contingent assets since the last annual balance sheet date

[ REFER FORMAT OF INTERIM FINANCIAL REPORTS]

Format of Trading,Income and Expenditure Account and Balance Sheet Of A Non-Trading Organization

slang — Sat, 23 Jan 2010 13:17:16 +0000

FORMAT OF TRADING AND INCOME AND EXPENDITURE ACCOUNT

[caption id="attachment_3594" align="aligncenter" width="464" caption="FORMAT OF BALANCE SHEET OF A NON TRADING ORGANIZATION"][/caption]