...Learning Objectives: At the end of the session, students should be able: 1) To define and differentiate significant influence, joint control and control. 2) To determine whether the investor can exert significant influence over an investee. 3) To determine when it is appropriate to use equity method in accounting for investments. 4) To understand the underlying principle of equity method. Reference: IAS 28: Investments in Associate and Joint Ventures I. Accounting for equity instruments from the point of view of the investor: A. Based on management’s intention for acquiring the investment. 1. Passive investment a. Fair value through profit or loss b. Available for sale investments: 2. Active investment Level of influence on investee’s management |Level of control |Definition |Type of entity | |Control |Power to govern |Subsidiary | |Joint control | |Joint venture | | | |Joint operation | |Significant influence |Power to participate |Associate | II. Existence of significant influence. Can the investor exert significant influence over the investee’s operating and financing decisions? IAS 28.3 Significant influence is the power to participate...
Words: 4451 - Pages: 18
...Table of Contents Executive Summary 3 Introduction 4 Research Findings 5 History of the FASB 5 Requirements Imposed by the FASB on Public Corporations 6 Impact of the FASB on the Investment Community and their Satisfaction with the FASB Standards 6 Recommendations 7 Conclusion 8 References 9 Executive Summary The purpose of this research is to provide a report to Acme Company management on the accounting and reporting standards of the Financial Accounting Standards Board (FASB) and the impact that the FASB will have on Acme Company. This research covers the history and goals of the FASB, the requirements imposed by the FASB on public corporations, and the impact that the FASB has on the investment community and their satisfaction with the FASB standards. The FASB was formed in the early 1970s, when it became evident that there was a real need for a clear, concise, accurate, and uniform financial reporting system. The FASB standards are known as GAAP, or Generally Accepted Accounting Principles. Adherence to these principles by publicly traded companies is required by and enforced by the Securities and Exchange Commission (SEC). GAAP is based on consistency, reliability, relevance, and comparability which help to ensure that the reports provided to all investors and creditors contain credible and accurate information. The investment community relies heavily upon the SEC and the FASB to continually monitor financial reporting systems....
Words: 2436 - Pages: 10
...Executive Summary The report captures the role of institutional investors in corporate governance. The relationship that exists between an institutional investor and a public company forms the experimental setting of the report. The government exists as the regulating authority for the different players in the market, however, the players at times deviate from the blueprint set out by the regulating authority because of the changing circumstances. (Drucker 2011, p. 107). The report analyses the different postures that an institutional investor assumes, depending on the situation at hand. The report also examines the reasons behind activist investing and establishes that an institutional investor is quite ambitious in her quest. The reason behind this is the high expectations of the contributors who have entrusted the institution with their funds. The report goes further to apply its own finding in analyzing the relationship between Hermes and Total and arrives at the conclusion that the former should go ahead in pressuring the latter to offer a level of accountability that reflects their expectations. In a nutshell, the report proposes that an institutional investor should be actively involved in the strategy process of the company that they invest in (Drucker 2011, p. 107). Table of Contents Executive Summary 1 Summary of recommendations 3 Introduction and brief history 4 Strategic audit 5 Consultants report: Equipment 7 Management and planning 7 Consultant's...
Words: 3766 - Pages: 16
...SUMMARY FINANCIAL REPORT 2010 CONTENTS 02 Chairman’s Statement 13 14 Consolidated Income Statement Corporate Data 05 Balance Sheets Summary Financial Statements 06 15 19 21 Statistics of Shareholdings Summary Directors’ Report Notes to the Summary Financial Statements 12 Independent Auditor’s Report 17 Notice of Annual General Meeting Proxy Form Request Form Extract of the Independent Auditor’s Report on the Full Financial Statements Important Notes For investors who have used their CPF monies to buy shares in the capital of United Industrial Corporation Limited, this Summary Financial Report is forwarded to them at the request of their CPF Approved Nominees and is sent FOR INFORMATION ONLY. The Proxy Form and Request Slip attached are not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them. CHAIRMAN’S STATEMENT 2010 OVERVIEW SINGAPORE CLOSED 2010 WITH A RECORD-SETTING GDP GROWTH OF 14.5%. THE SPECTACULAR GROWTH WAS LARGELY BOOSTED BY STRONG EXPANSION IN MANUFACTURING AS WELL AS THE SERVICES SECTORS. Performance Review and Dividend Following the completion of several residential property projects in the preceding year, revenue from trading property sales declined by $69.3 million (13%) to $478.2 million in 2010. Gross rental income from the Group’s commercial properties also dropped slightly by $12.9 million (4%) to $297.4...
Words: 9875 - Pages: 40
...Marketing management orientation * Marketing management wants to design strategies that will build profitable relationships with target consumers. * There are 5 alternative concepts under which organizations design and carry out their marketing strategies: Production, product, selling, marketing, and societal marketing concept. Five alternative concepts * 1. Production concept – The idea that the consumer will favor products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency. * 2. Product Concept- the idea that consumers will favor products that offer the most quality, performance, and features and that the organization should therefore devote its energy to making continuous product improvement. * 3. Selling Concept – The idea that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort. * 4. Marketing Concept- A philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. A customer-centered “sense and respond” philosophy. The job is not to find the right customers for your product but to find the right products for you customers. * 5. Societal marketing concept- the idea that a company’s marketing decisions should consider consumers’ wants, the company’s requirements,...
Words: 2564 - Pages: 11
...Executive Summary Green Investments (GI) is a financial service company that focuses on stocks of environmentally responsible companies. The Washington-based L.L.C. is lead by Sarah Lewis and Steve Burke. GI uses financial research purchased from Bear Stearns and in-house environmental responsibility analysis to make recommendations to clients. Services GI has developed a criteria-based marker system which is easy and effective in evaluating a wide range of different companies on their environmental impact. Only financially prudent/performing companies are evaluated, ensuring that its recommendations make both financial and environmental sense. Competitive Edge GI will leverage the proprietory evaluation system to quickly gain market share. The system is convenient and based on extensive research, providing a streamlined overview of the environmental performance of the companies. Market GI will concentrate on the unserved niche of environmental investing within the financial services market. GI faces indirect competition from environmentally responsible mutual funds, which do a similar job in assessing a company's environmental performance but do not allow for investing in individual equity. Management Team GI is lead by two experienced managers, Sarah Lewis, and Steve Burke. Sarah has a masters degree in environmental studies and has worked for the Environmental Protection Agency where she was responsible for preparing environmental impact statements. Steve has an MBA...
Words: 1393 - Pages: 6
...Ethics in Business Saint Leo University February 26, 2012 Abstract Ethics in business is as important as the business model itself. A company can become very successful without a strict adherence to ethics. However, that success is often short lived. As children we are taught a basic understanding of ethics. We are taught to share, play nice, and not to cheat. However, somewhere along the way ethics seems to take a backseat to the dollar. In the government’s case, not only is ethics losing out to the dollar, it is losing to the thirst for power. This is where regulation with stiff penalties and public shame come in to play. Regulation is needed to keep companies honest and force them to practice fair business standards. A company must educate the employees on the importance of ethics and the consequences of not adhering to them. Without ethics who are we? We must be diligent in ensuring businesses are ethical. Otherwise there will be a two tiered society of the haves and the have-nots. What is Ethics? The Business Dictionary (n.d.) defines ethics as, “The basic concepts and fundamental principles of right human conduct. It includes study of universal values such as the essential equality of all men and women, human or natural rights, obedience to the law of land, concern for health and safety and, increasingly, also for the natural environment.” In other words, ethics is an accumulation of your morals put into place. So how does a person’s individual morality...
Words: 1375 - Pages: 6
...Business Research Report Impact of FASB on Company A Presented to: CEO of Company A Assessment Code: RWT1 Table of Contents Executive Summary 3 Introduction 4 Research Findings 4 FASB History 4 Public Corporation Requirements (GAAP) 5 Investor Impact 6 Recommendations 7 Conclusion 8 References 9 Executive Summary The purpose of this report is to research the accounting and reporting standards of the Financial Accounting Standards Board (FASB) and report the impact FASB may have on our company. The following research explains the history and purpose of FASB, the accountability requirements on public corporations, the effectiveness of FASB in setting standards in order to improve financial reporting in the public sector, and finally, the impact on and satisfaction of the investment community in regards to FASB’s imposed standards. The Financial Accounting Standards Board (FASB) was established in 1973 and has been the designated organization in the private sector for establishing standards of financial accounting in governing the preparation of financial reports by nongovernmental entities. These standards, which are enforced by the authority of the Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants, are important to the efficient functioning of the economy. It is in the best interest of a capital market that investors and potential investors have complete and reliable information provided them so they...
Words: 2406 - Pages: 10
...Funding is the act of providing resources, usually in form of money (financing), or other values such as effort or time (sweat equity), for a project, a person, a business or any other private or public institutions. The process of soliciting and gathering fund is known as fundraising. Sources of funding include credit, donations, grants, savings, subsidies, taxes, Fundings such as donations, subsidies and grants that have no direct requirement for return of investment are described as "soft funding" or "crowd funding". Funding that facilitates the exchange of equity ownership in a company for capital investment via an online funding portal as per the Jumpstart Our Business Startups Act (alternately, the "JOBS Act of 2012") (U.S.) is known as "hyper funding". Funds can be allocated for either short-term or long-term purposes. Types of funds Grants are made to non-profit organizations by development assistance agencies and foundations. Usually grants do not have to be repaid. Grant money is available to enhance country institutional capacity, to support governmental and non-governmental institutions and to finance project formulation, policy reform and sector management and development. Grants are provided by bilateral donors, multilateral grant aid institutions, United Nations organizations and specialized agencies, international financing institutions, international non-governmental organizations, the private sector, foundations and charity organizations. Loans, unlike...
Words: 2832 - Pages: 12
...FINANCIAL MARKETS FIN 4040A 1. A financial market is the market for capital, a significant factor of production. The obligations created are in form of financial assets or financial instruments severally called securities. These assets are intangible and offer promises and claims by issuers and holders. A classification of the financial markets will greatly improve our mental constructs. CLASSIFICATION OF FINANCIAL MARKETS | | Type of classification |Specific operational terms | | |1 |Nature of claim |DEBT MARKETS | | | | | | | | | |EQUITY MARKETS | | |2 | |MONEY MARKET | | | | | | | | |Maturity of claim |CAPITAL MARKET | | |3 | ...
Words: 1075 - Pages: 5
...Government Regulations Introduction Over the years, the US has seen and recovered from major financial setbacks. With the uncovering of each new company scandal, legislation has been swift to put ordinances and laws into place to prevent the same mistake from happening twice. Although some of the events majorly affected every American, some were swiftly and quickly identified which helped offset some of the major repercussions that could have possible be occurred. Three such laws that were implemented due to financial catastrophe include the Securities Act of 1933 & 1034, the Foreign Corrupt Practices Act of 1977, and the Sarbanes - Oxley Act. I. Securities Act of 1933 & 1934 A. Summary of Regulation * Securities Act of 1933 * First major federal legislation to regulate the offer and sale of securities * Created by Congress during the aftermath of the stock market crash of 1929 and during the ensuing Great Depression * Purpose is to make sure that buyers of securities receive complete and accurate information before investing (Graham, Hazarika, & Narasimhan, 2011) * Securities Act of 1934 * Created to provide governance of securities transactions on the secondary market (after issue) and regulate the exchanges and broker-dealers in order to protect public investors B. Analysis of Related Fraud/Scandal * Crash of 1929 * The most devastating Stock Market crash in US history ...
Words: 3180 - Pages: 13
...history of COSO, some of which is excerpted in the screen shots below. * Under “Guidance” you will find free executive summaries of some of the key studies COSO has done over the years. Click on the headings for “Enterprise Risk Management” “Internal Controls” or “Fraud Deterrence” and then click on “More” after the brief summary to get the executive summary of the study. I have attached the Executive Summary for Integrated Framework (1992) as a Reading Following this posting. * Under “Newsroom” and “Home” you will find descriptions of current COSO activities. COSO was an attempt by the private sector to do what congress did with SOX. At present, companies have guidance from COSO and regulatory requirements from SOX that are sometimes overlapping and sometimes in conflict. COSO was organized in 1985 to sponsor the National Commission on Fraudulent Financial Reporting, an independent private-sector initiative that studied the causal factors that can lead to fraudulent financial reporting. It also developed recommendations for public companies and their independent auditors, for the SEC and other regulators, and for educational institutions. The National Commission was sponsored jointly by five major professional associations headquartered in the United States: the American Accounting Association (AAA), the American Institute of Certified Public Accountants (AICPA), Financial Executives International (FEI), The Institute of Internal Auditors (IIA), and the National...
Words: 560 - Pages: 3
...Professor Togbenou November 25, 2013 1. Identify and explain the main sections of the annual report. The main sections of the McDonalds Corporations annual report consist of a 6 year Summary which provides the user with a brief overview of how the corporation has done over the previous 6 years which also includes the current year’s annual report. The report shows items that are on other parts of the annual report such as total revenues, net income, total assets and total shareholders’ equity. The 6 year Summary also shows items such results from company-operated and franchised restaurants giving a total under “system wide restaurants”. The 6 year Summary also shows franchised sales but notes that “franchised sales are not recorded as revenues by the company”. The information is provided to give an understanding of the corporations’ performance financially. The Management’s Discussion and Analysis of Financial Condition and Results of Operations provides the user with an overview as to a description of the business, strategic direction and financial performance for the U.S. and Europe. It also gives highlights from the year, and an outlook for the next or current year (2013) for the U.S. and Europe. The Consolidated Statement of Income provides total revenues through company operated restaurant sales and expenses which includes franchised restaurants-occupancy expenses and net income including operating income and income before provisions for income taxes. This...
Words: 734 - Pages: 3
...INDEPENDENT POWER PLANTS (IPP) PROGRAM INVESTMENT OPPORTUNITIES IN IPP PROJECTS BY DR AMER M. AL-SWAHA HEAD OF IPP PROGRAM JUNE 2007 1 CONTENTS 1. INTRODUCTION 2. HISTORICAL SUMMARY OF SEC POWER DEMAND 3. WHY IPP (INDEPENDENT POWER PLANT)? 4. INVESTMENT ENVIRONMENT 5. IPP IMPLEMENTATION 6. INITIAL PROJECTS OF THE IPP PROGRAM 7. DETAILS OF SEC IPPs 8. IPP PROGRAM SCHEDULE 9. PROJECT CONTRACTUAL RELATIONSHIPS 10. DEVELOPMENT STAGES 11. OPPORTUNITIES 12. CONCLUSION 2 INTRODUCTION SAUDI ELECTRICITY COMPANY WAS ESTABLISHED IN 2000, BY MERGING ALL SAUDI REGIONAL ELECTRICITY COMPANIES TOGETHER WITH PROJECTS OF THE ELECTRICITY CORPORATION INTO A SINGLE ENTITY THE SAUDI GOVERNMENT OWNS 81% OF SEC SHARES IN 2006 , SEC POWER GENERATION WAS 31 GW COMPARED TO 1.4 GW IN 1976. NUMBER OF PRESENT POWER PLANTS IS 70 , IN 2006 SEC HAS PURCHASED 4 GW FROM SWCC AND LARGE CUSTOMERS, IN 2006 , THIS WILL RAISE TO 21 GW DUE TO FUTURE IPP/IWPP PROJECTS CURRENT SEC POWER TRANSMISSION INCLUDES 132/230/380 KV VOLTAGES WITH 380 KV INTERCONNECTIONS BETWEEN CENTRAL & EASTERN REGIONS AND FUTURE LINK TO GCC NETWORKS (UNDER CONSTRUCTION) ESTIMATED CAPITAL EXPENDITURE OF SEC FOR THE NEXT 10 YEARS IS SR 190 BILLION 3 HISTORICAL SUMMARY OF SEC POWER DEMAND THE HIGH GROWTH IN POPULATION AND ELECTRICITY POWER DEMANDS IS SHOWN BELOW FOR: YEAR 1976 POPULATION – 7.7 MILLION POWER DEMAND – 0.9 GW YEAR 2006 POPULATION – 23.7 MILLION POWER DEMAND – 29.9 GW YEAR 2024 POPULATION – 50 MILLION POWER...
Words: 1206 - Pages: 5
... Table of Contents I. Executive Summary 1 II. Introduction 1 III. Review of Literature 1 IV. Analysis 1 V. Recommendations 1 VI. Summary and Conclusions 1 VII. Appendix x 1 VIII. References 1 I. Executive Summary Accounting fraud is the deliberate manipulation of accounting records in order to make an organization's financial performance or condition seem better than it actually is. There are many examples of accounting fraud. * Merging short and long term debt into one amount for improving the perceived liquidity of the organization or a company. * Failing to disclose the risky investments or creative accounting practices. * Over-recording the sales revenue. * Under-recording expenses i.e. depreciation of expenses. From Enron, WorldCom and HealthSouth, it appears that accounting fraud is a major problem that is increasing in frequency and severity. research evidence has shown that a growing number of frauds have undermined the integrity of financial reports, contributed to substantial economic loses, and destroyed investors' confidence regarding the reliability of financial statements. The increasing rate of white-collar crimes demands stiff penalties and strong punishments. II. Introduction New laws and guidelines have helped reduce, but not eliminate fraud. Enron, WorldCom and HealthSouth scandals were detrimental to the public. Millions of dollars in investments the public made into those companies have been lost. The SEC (Securities...
Words: 1751 - Pages: 8
