Explain what you understand by the term 'substance over form'. Is it appropriate that this concept should be used as a guide in setting accounting standards?

Explain what you understand by the term 'substance over form'. Is it appropriate that this concept should be used as a guide in setting accounting standards? Introduction The overriding requirement of a company's financial statements is that they should present a true and fair view, and represent faithfully the underlying transactions and other events that have occurred. To achieve this, transactions are required to be accounted for in terms of their 'substance' or commercial reality rather than their legal form. This principle is introduced in the Accounting Standard Board 'Statement of Principle for Financial Reporting', and also in many standards, in particular Financial Reporting Standard No. 5 (FRS 5), "Reporting the Substance of Transactions" and SSAP 21 'Accounting for Leases and Hire Purchase Contracts'. To understand the term 'substance over form' (henceforth SOF) properly, this essay firstly describes briefly what is mean by the 'substance' of a transaction and how to determine 'substance'. It secondly explains the importance of SOF. This point is illustrated by analysing an example of the treatment of 'consignment stock' and MicroStrategy case. Thirdly, it discusses some debates over the 'SOF' methodology, and argues it would not be enforced as a standard but used to develop individual and specific standards to deal with particular areas. Finally, it concludes

  • Word count: 1781
  • Level: University Degree
  • Subject: Business and Administrative studies
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Eu Expansion and its impact

Executive Summary This assignment is carrying a comparison of New accession to EU countries which are Poland, Romania, and Bulgaria to the Old EU countries such as United Kingdom Germany and France. It will cover the major differences of these countries such as GDP, population and economic status of the countries. Introduction This assessment will be illustrated by data and graphs provided officially and will support my case to compare these three Eastern-European countries to three Western European Countries. These countries are Poland, Bulgaria, and Romania to United Kingdom, France, and Germany. History of Three Eastern European Countries with the GDP graph Poland In 2007, GDP grew 6.7%, by rising on private consumption, a jump in investment, and rapidly increasing exports. Today it has prosperous private sector. Consumer price inflation - at 2.1% in 2007 and it remains among the lowest in the EU. Since 2004, Poland becoming a member of EU and access to EU structural funds has provided the great increase to economy. There population accordingly is 38,518,241 (July 2007 est.) Source: http://easterneuropeeconomy.blogspot.com/2007/08/polish-gdp-q2-2007.html Romania It joined the European Union on 1 January 2007The country emerged in 2000 from a punishing three-year recession thanks to strong demand in EU export markets. Domestic consumption and investment have fueled

  • Word count: 2051
  • Level: University Degree
  • Subject: Business and Administrative studies
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What is materiality?

What is materiality? Materiality refers to quantitative and qualitative omissions or misstatements that make it probable the judgement of a reasonable person would have been changed or influenced. These omissions or misstatements can be individually or in the aggregate material. Accountants and auditors are concerned about this. Remember what will be in your reports: * Review report: "Based on my review, I am not aware of any material modifications that should be made...." * Audit report: "In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ....." Materiality needs to be considered at two times, in * planning the audit and designing audit procedures. * evaluating whether financial statements taken as a whole are presented fairly, in all material respects, is accordance with GAAP. Materiality and Planning the Audit Financial Statement Level - The planning starts here! * Begin by making a preliminary estimate about materiality levels for balance sheet and income statement. See pages 226 - 227 for some rules of thumb. * Select the smallest estimate for purposes of developing your audit plan. If o $100,000 would materially misstate income, and o $200,000 would materially misstate total assets Your audit plan should be designed to detect omissions or misstatements, that

  • Word count: 1733
  • Level: University Degree
  • Subject: Business and Administrative studies
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General purpose financial statements

Whilst some internal stakeholders such as management may request special purpose financial reports (SPFR's) to be prepared in order to aid their decision making, most stakeholders do not enjoy such privileges. This means that such stakeholders must rely on general purpose financial reports (GPFR's) published by the businesses as the major source of information on the financial health of the businesses in which they have interests in and for stakeholders involved in the financing, investing or operating activities of the business, the financial health of the business is a major factor in their decision making process. Thus it is incorrect to say that GPFR's are useless in helping users make decisions about future actions based on the shallow premise that they only tend to reflect past events. The value of GPFR's to decision making is recognised by professional accounting bodies such as the Australian and New Zealand Institute of Chartered Accountants (ICANZ). The ICANZ states that the intended purpose of GPFR's is to 'provide information to meet the needs of external users who are unable to require, or contract for, the preparation of special reports to meet their specific information needs'1. This implies that GPFR's are just as useful in the decision making process to external users as SPFR's are to the internal users who request them. A common example of GPFR's helping

  • Word count: 840
  • Level: University Degree
  • Subject: Business and Administrative studies
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research method learning journal

Learning Journal Learning Style Before I can proceed with a critical evaluation of my skills development, it is imperative I reflect on and determine my predominant learning style. I have used Kolb's et al (1984) Learning Style Inventory (LSI) theory and the Myers-Briggs Type Indicator (MBTI) theory (1998) in order to evaluate my learning styles and abilities. 'Appendix 1' illustrates my results of these self-completion tests. Kolb's learning style model is illustrated in 'Appendix 2' The LSI is simply an indication to how I view myself as a learner (Kolb et al, 1984). The inventory showed I have a main orientation towards Active Experimentation (AE), illustrated in 'Appendix 3 '. The characteristics of this style suggest I focus on influencing people, am good at getting tasks accomplished and that I value having an impact and influence on the environment. The combination scores from this inventory describe my learning style more accurately since everybody's style is a combination of the four learning modes (Kolb et al, 1984). These scores, shown in the grid in 'Appendix 4', suggest I have an Accommodative learning style that emphasises AE and Concrete Experience (CE). The greatest strength of this style is explained by Kolb et al (1984) in that it involves 'doing things' by seeking involvement in new experiences and being adaptable to changing situations. Kolb et al

  • Word count: 5399
  • Level: University Degree
  • Subject: Business and Administrative studies
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david ricardo

Explain how Ricardo's economic theories provided the essential theoretical critique of the Corn Laws. * Introduction David Ricardo was born in London on 19th April 1772, son of Jewish merchant-banker from Holland; Ricardo joined his father as a stockbroker at the age of 14. When Ricardo married to a Quaker, his father cut him up from the business. Ricardo became a Unitarian and at the age of 22 with a capital of £800 with the support of financial community, he became an independent stockbroker. He was also known to be the successful businessmen, who retired at 42 with a fortune of approximately £1 million and established himself as a landowner. Ricardo was an independent member of the parliament from 1819 until his death. During his time, he supported a tax on capital to pay off the national debt; currency reform; abolition of Corn Law. * The Corn Laws In 1804, Corn Law was first introduced in Britain because of the landowners at that time who elected in the parliament thought to have protected their profits by imposing a duty on the imported corn. During the war period, it was very hard to import corn from Europe. This result to an expansion of British wheat and because of the shortage of bread prices was touching the sky. Farmers at that time feared that as soon as the war ended prices of corn will decrease which did happen as they predicted and the price of corn

  • Word count: 1435
  • Level: University Degree
  • Subject: Business and Administrative studies
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Keynesian policies are generally pursued by socialist governments and monetarist policies by capitalist governments.

Keynesian policies are generally pursued by socialist governments and monetarist policies by capitalist governments. To compare and contrast the two different methods of controlling the economy we must look back to the labour government of the seventies which pursued Keynesian policies of high personal taxation, high government spending, Stamp duty, National Insurance, frozen income tax allowances, unfettered union powers, and government intervention e.g. their belief that huge privatised government monopolies were the way forward. This eventually led to the countries economy being destroyed due to the development of a huge black hole in the economy i.e. a huge difference between what the country was making and what it was spending. Inflation outstripped wage rises and the resulting union led strikes brought the country to a standstill culminating in the winter of discontent where in this country even the rubbish wasn't collected and the dead buried. It would appear that extreme Keynesian policies simply don't work although idealistically the Marxist principles (completely unachievable for many reasons) behind these policies are to be commended. (Then we would all be living in paradise?) Some people think that the essential truth of Keynes big idea- that even the most productive economy can fail if consumers and investors spend too little, that the pursuit of sound money

  • Word count: 1530
  • Level: University Degree
  • Subject: Business and Administrative studies
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Business Plan

RMIT International University Vietnam Bachelor of Commerce Program ASSIGNMENT COVER PAGE Your assessment will not be accepted unless all fields below are completed Number of pages including this one: 68 pages Word Count: 6,274 words EXECUTIVE SUMMARY Located in the Viet-Sing Industrial Park (Binh Duong Province) with a total area of 1,000 square meters, "2 IN 1 ORAL SOLUTION CO. LTD." will commence operations in July 2007. Being part of the dramatically growing oral hygiene industry in Vietnam, our company manufactures the unprecedented "2 in 1 toothbrush", which is a highly convenient and premium-quality combination of toothbrush and toothpaste into one single product, thus providing customer with an integrated oral hygiene solution. Distinct opportunity exists for our "2 in 1 toothbrush" due to the increasing need for convenience among consumers, especially travelers and office workers; the increasing awareness of life quality, health and personal care; the existence of market gap and strong market growth. "2 in 1 toothbrush" consists of 3 components: a complete toothbrush, a rubber toothpaste tube and a toothbrush cap, fitting nicely with one another. Our company offers two types of toothbrush catering for customers' short-term and long-term needs of our product: NORMAL TOOTHBRUSH, which is priced at 10,000VND / unit and can be used in a maximum of 2 weeks,

  • Word count: 21342
  • Level: University Degree
  • Subject: Business and Administrative studies
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Discuss the empirical evidence supportive of and against market efficiency.

) Discuss the empirical evidence supportive of and against market efficiency. The efficient market hypothesis (EMH) predicts that market prices should incorporate all available information at any point in time (Clarke, Jandik and Mandelker, p.9). A market is seen as efficient if it incorporates all new information in its security prices in a rapid and unbiased manner, meaning investors should not be able to systematically outperform the market. Different kinds of information influence the security values. Hence, there are three versions of the EMH depending on the information assumed to be impounded in prices. weak form: share prices fully reflect the information implied by all prior price movement (Clarke, Jandik and Mandelker, p.10). semi strong form: share prices respond instantaneously without bias to newly published information. (Clarke, Jandik and Mandelker, p.10). strong form: eshare prices fully reflect not only published information but all relevant information including data not yet publicly available.(Clarke, Jandik and Mandelker, p.10). Since the introduction of the EMH, extensive empirical research has been done towards the EMH, with evidence both for and against it. Evidence in favour of the EMH Tests of weak form efficiency originate from the random walk theory, which implies that successive price movements should be independent; future stock prices

  • Word count: 1941
  • Level: University Degree
  • Subject: Business and Administrative studies
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Externalities and overfishing in the fishing industry

Introduction Due to our large demand for fish we are overfishing the oceans. This is damaging our fish stocks beyond repair. The EU has tried to make the fishing industry more sustainable by implementing quotas, although there are other options available with differing results. I will first analyse why overfishing occurs and then the methods which could be used to prevent it. Why does overfishing occur? In markets where externalities exist the quantity of the competitive equilibrium (Q1) is different to the socially optimal level, SOL, (Q2) as shown in Figure 1. This model assumes there are no transition mechanisms when moving from one equilibrium to another. Negatives externalities are evident in the fish market. A negative externality exists when “the actions of one party imposes costs on another” (Pindyck and Rubinfeld, 2009). There is a large demand for a small number of species of fish. Since the fish stock cannot be replenished as quickly as it is caught, these popular species become less abundant which in turn makes them more costly to catch. Large-scale fishing can also disrupt food chains and harm ecosystems. These costs are shown in Figure 1 as the Marginal External Cost (MEC) curve. The Demand curve represents the marginal benefit to society and the Supply curve represents the marginal cost (MC) to the producer of producing one more unit. The

  • Word count: 1524
  • Level: University Degree
  • Subject: Business and Administrative studies
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