Fundamentals of financial reporting

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Fundamentals of financial reporting

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Due to growing importance of intangible assets, there has also been a significant change in the standards associated with the accounting treatment of goodwill. This new standard provides significant changes for the accounting treatment of intangible assets, goodwill and business combinations.

GAAP the value of goodwill is recorded as the excess of the cost of an acquisition price over the fair value of acquired net assets. It will be recorded only when the carrying amount of goodwill exceeds its implied fair value.

Before the new accounting standards, companies generally recorded the total amount of goodwill in the books and not assign the value of goodwill to individual reporting unit of business. A reporting unit is defined in the Statement of Financial Accounting Standard There should be followed two-steps impairment to identify potential goodwill impairment as well as measure the amount of impairment loss to be recognized if any.

Fundamentals of financial reporting

Philips company first identified and measured the impairment loss on the tangible assets. The Philips next identifies and measures the impairment loss on brand name. An organization requires to the valuation of the fair value of all identifiable fair value of all tangible and intangible assets of the business for recognition of goodwill.

On the day of acquisition of goodwill, the impairment test is applied at the level of the cash-generating unit. It is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets and the group of assets.

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An organization recognizes an impairment loss if the recoverable amount of unit is less than the balance sheet carrying value. As above the Same example proceed:2 Accounting Fundamentals for Health Care Management The financial accounting aspect of account- ing is a formalized system designed to record the financial history of the health care orga-.

Accounting has variously been defined as the keeping or preparation of the financial records of an entity, the analysis, verification and reporting of such records and "the principles and procedures of accounting"; it also refers to the job of being an accountant.

The objective of an audit of financial statements is to enable an auditor to express an opinion as to whether the financial statements are prepared, in all material respects, in accordance with International Financial Reporting Standards or another identified financial reporting framework.

Fundamentals of Financial Statements - Essay

Heading: 1: Purpose of Financial Reporting (Learning Outcome ) Five ethical principles are explained below to identify the ethical requirement of the financial reporting and the consequences of the unethical behaviour. Five basic ethical principles There are five basic ethical principles to .

Definition of accounting concepts: Rules of accounting that should be followed in preparation of all accounts and financial statements. The four fundamental concepts are (1) Accruals concept: revenue and expenses are recorded when.

Learn about professional and personal finance management including how to create invoices and reconcile accounts with finance software tools such as Excel, Quicken, and QuickBooks.

Fundamentals of International Financial Accounting and Reporting - Roger Hussey - Google Books