International Financial Reporting Standards essay

FIRS 9-1: What is component appreciation, and when must it be used? Component depreciation is when an asset is depreciated differently based upon different parts. An example when this must be used would be in the case Of large real estate holdings. The plumbing, HAVE, Roofing, etc… All have different usage periods, thus they can be depreciated separately. FIRS 9-2: What is revaluation of plant assets? When should revaluation be applied? Revaluation of plant assets is the process of changing forms of values in terms of book value to fair market value. Real estate would be the perfect asset in this example as well.

Perhaps you purchased a building 20 years ago and it has now appreciated. Revaluation of this asset could potentially affect your bottom line significantly and look better to investors. FIRS 9-3: Some product development expenditures are recorded as development expenses and others as development costs. Explain the difference between these accounts and how a company decides which classification is appropriate. If an expense is recorded of $5000 for materials needed in the development of a time machine but only $3700 of parts where actually used then this allows a differentiation.

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FIRS 10-2: Explain how FIRS defines a contingent liability and provide an example. A contingent liability is potential loss that could happen in the future based but have uncertain amounts. This could stem from any number of reasons including law suits, warranty claims and even large scale disasters such as nuclear melt downs and explosions. FIRS 0-3: Briefly describe some similarities and differences between GAP and FIRS with respect to the accounting for liabilities. From a general stand point GAP and FIRS are very similar and only vary in a few instances.

One of which is the fact that GAP requires liabilities to be reported in their order of liquidity where as FIRS requires them in reverse liquid oddity order. Conclusion At this point it is evident that there are only a few differences in the two standards but it does seem that the International Financial Reporting Standards seem to be a little lax in it’s regulations. In order for the SEC to make a reasonable decision they will have to take into consideration the accounting industry as a whole from the professors who teach up and coming accountants to the most tenured senior accountant of many companies.

This is a big decisions and one that is not to be taken lightly for at this point we are not even sure which standards do the best good when preventing fraud. References What a Switch from GAP to FIRS May Mean for Investors. (Novo. 201 1). Retrieved May 16, 2015, from http://www. Businesses. Com/personae-finance/2011 II 1 /28/what-switch-from- gap-to-firs-may-mean-for-investors/ Yankton L. (2013). International Financial Reporting Standards – FIRS. Retrieved from http://www. Investigated. Com/terms/i/firs. Asp Kismet, Paul D. (2013). Financial Accounting: Tools for Business Decision Making (7th De. . John Wiley & Sons, Inc. Week 5 Individual: FIRS vs. GAP Paper Note: All formal papers submitted must be accompanied by a Turbulent Originality Report and a signed Certificate of Originality. Papers are not considered complete without both documents. Content and Organization 70 percent Points Available 4. 2 Points Earned Additional Comments: All key elements of the assignment are covered in a substantive way. FIRS -1: In what ways does the format of a statement of financial of position under FIRS often differ from a balance sheet presented under GAP?

FIRS 2-2: Do the FIRS and GAP conceptual frameworks differ in terms of the objective of financial reporting? Explain. FIRS 2-3: What terms commonly used under FIRS are synonymous with common stock and balance sheet? FIRS 3-1 : Describe some of the issues the SEC must consider in deciding whether the united States should adopt FIRS. FIRS 4-1 : Compare and contrast the rules regarding revenue recognition under FIRS versus GAP. FIRS 4-2: Under FIRS, do the definitions of raven uses and expenses include gains and losses? Explain.

FIRS 7-1 : Some people argue that the internal control requirements of the Serbians-Solely Act (SOX) put U. S. Companies at a competitive disadvantage to companies outside the United States. Discuss the competitive implications (both pros and cons) of SOX. You provided an excellent discussion of the key elements. Nice job! See comments above. Organization / Development 15 Percent points Available 0. 90 The body of the paper is 700 to 1 ,050 words in length. Paragraph transitions are present, logical, and maintain the flow throughout the paper.

The tone is appropriate to the content and assignment. Sentences are complete, clear, and concise. There is an introduction and a conclusion. Excellent! Mechanics The paper-?including tables and graphs, headings, title page, and reference page-?is consistent with PAP formatting guidelines and meets course-level requirements. Intellectual property is recognized with in-text citations and a reference page. Rules of grammar, usage, and punctuation are followed. Spelling is correct. This rubric is pasted at the end of the paper.