Premium Essay

“Upward Revaluation of Nonfinancial Assets”

In: Business and Management

Submitted By maribelnunez
Words 973
Pages 4
The article “Upward Revaluation of Nonfinancial Assets,” by David Sardone and Tom Tyson, explains that the two most widely recognized sets of accounting standards, namely Generally Accepted Accounting Practice in the US (US GAAP) and International Financial Reporting Standards (IFRS), address the measurement of non-financial assets differently, and compelling arguments exist in favor of each approach. Notes that, despite the challenges to auditing fair value estimates, some suggest that Financial Accounting Standards Board (FASB) should conform more closely to current IFRS procedures by allowing the revaluation of certain non-financial assets. The authors propose that FASB should allow the upward revaluation of fixed assets, such as property, plant, and equipment (PP&E), which have extended economic lives.
The main difference discussed is revaluation of nonfinancial assets compared to fair value. GAAP does not permit revaluation whereas IFRS is in support of revaluation. Also, IFRS permits the reversal of impairment losses from prior periods for all nonfinancial assets besides goodwill. The IFRS standard for accounting for PPE differs from the treatment of available-for-sale investments under GAAP. Some similarities, however, include the fact that initial recognition of an asset is valued at cost. As always, the IFRS approach is a little bit more lenient, as it is more principles-based, and gives companies more freedom to decide how they want to value their assets. The cost model is the only approach allowable under GAAP to value nonfinancial assets, whereas under IFRS, the cost model and the revaluation model can be used. The article shows the criteria for an asset to be considered available-for-sale under U.S. GAAP; with points such as “it must be available for immediate sale in its present condition,” and “the entity is actively trying to locate a buyer” (Sardone...

Similar Documents

Premium Essay

Revaluation Assets

...about the accounting treatment at the same subject under U.S GAAP and IFRS. Example of this is the argument about whether U.S GAAP should allow upward revaluation of non-financial asset of IFRS which was described in details on the article “Upward Revaluation of Non-financial” in the CPA journal November 2012 by David Sardone and Tom Tyson. Base on the article, this paper will explore further the comparison of the IFRS standard for accounting treatment for Property Plant Equipment with the treatment of available-for-sale investments under GAAP, along with the support about the authors’ suggestion about the US GAAP’s adoption of IFRS treatment to the property, plant, equipment especially with those have lives in excess of ten years. Even though many differences between IFRS and U.S GAAP exist and can be the critic target for U.S companies, there are still similarities from these two accounting standards. Asset held for sale under GAAP is defined as those which meet the following criteria: “It must be available for immediate sale in its present condition; the entity is actively trying to locate a buyer, and other actions required to complete the plan to sell the asset have been initiated; the sale of the asset must be probable, and the transfer of the asset is expected to qualify for recognition as a completed sale within one year; the asset is actively being marketed for sale at a price that is reasonable in relation to its current fair value; actions required to...

Words: 1688 - Pages: 7

Premium Essay

Finance

...The Framework of FRS F.R.A SS7 Two systems worldwide R22: Financial Statement Analysis: An Introduction R23: Financial Reporting Mechanics R24: Financial Reporting Standards The Financial Accounting Standards Board (FASB) The Statement of Financial Accounting Standards (SFAS) R25: Understanding the I/S R26:Understanding the B/S R27: Understanding the C/F R28: Financial Analysis Techniques R29: Inventories R30: Long-Lived Assets R31: Income Taxes R32: Long-Term Liabilities and Leases U.S. GAAP SS9 SS8 Generally Accepted Accounting Principle The International Accounting Standards Board (IASB) The International Accounting Standards (IAS) The International Financial Reporting Standards (IFRS) SS10 Recognition R33: Financial Reporting Quality R34: Financial Statement Analysis: Applications Measurement IFRS Disclosure Financial analysis 3-375 4-375 Framework Financial reporting & analysis 1. The role of financial reporting and financial statement analysis The role of financial reporting The International Accounting Standards Board (IASB) definition: 2. The resources used for financial statement analysis Financial reporting refers to the way companies show their financial performance to investors, creditors, and other interested parties by preparing and presenting financial statements. Key financial statements Other relevant information The objective of financial statements is......

Words: 25054 - Pages: 101

Premium Essay

Economics

... IMF Definition The IMF definition: "Balance of Payments is a statistical statement that summarizes transactions between residents and nonresidents during a period. The balance of payments comprises the current account, the capital account, and the financial account. "Together, these accounts balance in the sense that the sum of the entries is conceptually zero." The current account consists of the goods and services account, the primary income account and the secondary income account. The financial account records transactions that involve financial assets and liabilities and that take place between residents and nonresidents. The capital account in the international accounts shows a. Capital transfers receivable and payable b. The acquisition and disposal of nonproduced nonfinancial assets. Components of Balance of Payment * Current account The current account is the net change in current assets from...

Words: 7239 - Pages: 29

Premium Essay

Ifrs

...IFRS and US GAAP: similarities and differences IFRS readiness series October 2012 Table of contents The heart of the matter 2 US financial reporting will change significantly within the next several years An in-depth discussion 4 Examining the implications IFRS affects US businesses in multiple ways What this means for your business 6 Anticipate and manage the change What companies can and should do now October 2012 The heart of the matter US financial reporting will continue to change over the next several years Although US companies will not when, and how IFRS might be be permitted to use International incorporated into the US financial Financial Reporting Standards (IFRS) reporting system. for US public filings in the foreseeable • In May 2011, the SEC’s Office of future, IFRS has been affecting US the Chief Accountant published a companies for some time, primarily Staff Paper exploring one possible through engaging in cross-border method to incorporate IFRS merger-and-acquisition (M&A) into the US financial reporting activity, meeting the reporting needs system, involving an active of non-US stakeholders, and assisting Financial Accounting Standards with or monitoring of the IFRS Board (FASB) incorporating IFRS requirements of non-US subsidiaries. into US GAAP over an extended US companies are also becoming period of time (the “endorsement” increasingly aware of IFRS, as key method). Under this method, the aspects of US......

Words: 82711 - Pages: 331

Free Essay

Management

...ANNUAL REPORT 2013 COMMUNITY DRIVEN VISION To actively contribute in meaningful and sustainable ways to communities, families in need and other worthy causes. MISSION To provide support and assistance to these community-focussed initiatives, by engaging the collaboration of A.P. Eagers and its automotive industry network, employees and other stakeholders. OBJECTIVES • • To encourage and support engagement by A.P. Eagers and its stakeholders in these initiatives. To secure voluntary assistance through financial support, sponsorship, skills transfer and in-kind donations to worthy and well-run organisations and other causes. To deliver 100 cents of every dollar donated to the intended recipients. To operate with the highest standards of integrity. • • From its earliest days, the company has been community driven. Reaching out to a local hospital for their ‘hospital tag day’ in November 1912, company founders Messrs. E.G. Eager and Son lent motor cars to nurses and children who collected over £70 in their fundraising initiative. (STATE LIBRARY OF QUEENSLAND 125907) On behalf of A.P. Eagers, I would like to introduce you to the A.P. Eagers Foundation. For over a hundred years we have been proactive contributors to the communities in which we serve. Through our dealerships and other operations, we have led the way in supporting hundreds of worthwhile groups ranging from local charities, community service groups and schools to sporting clubs, health......

Words: 40875 - Pages: 164

Premium Essay

Accounting

...STUDY MATERIAL Integrated Professional Competence Course PAPER : 1 ACCOUNTING VOLUME – I BOARD OF STUDIES THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA This study material has been prepared by the faculty of the Board of Studies. The objective of the study material is to provide teaching material to the students to enable them to obtain knowledge and skills in the subject. Students should also supplement their study by reference to the recommended text books. In case students need any clarifications or have any suggestions to make for further improvement of the material contained herein, they may write to the Director of Studies. All care has bee n taken to provide interpretations and discussions in a manner useful for the students. However, the study material has not been specifically discussed by the Council of the Institute or any of its Committees and the views expressed herein may not be taken to necessarily represent the views of the Council or any of its Committees. Permission of the Institute is essential for reproduction of any portion of this material. © The Institute of Chartered Accountants of India All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior permission, in writing, from the publisher. Revised Edition Website E-mail Committee/ Department ISBN No. Price Published by : : : : : :......

Words: 186944 - Pages: 748

Premium Essay

Gaap vs Ifrs

...Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers A Comparison of U.S. GAAP and IFRS A Securities and Exchange Commission Staff Paper November 16, 2011 OFFICE OF THE CHIEF ACCOUNTANT UNITED STATES SECURITIES AND EXCHANGE COMMISSION This is a paper by the Staff of the U.S. Securities and Exchange Commission. The Commission has expressed no view regarding the analysis, findings, or conclusions contained herein. TABLE OF CONTENTS I.  II.  Introduction..........................................................................................................................1   Methodology ........................................................................................................................2   A.  Scope of the Analysis...............................................................................................2   B.  MoU and Other Joint Projects..................................................................................3   C.  SEC Rules and Regulations .....................................................................................8   D.  General Observations and Clarifications .................................................................8   Comparison of Requirements ............................................................................................11   A.  Accounting Changes and Error......

Words: 24926 - Pages: 100

Premium Essay

British Airways

...British Airways Plc Annual Report and Accounts Year ended 31 December 2012 Company registration number: 1777777 This page has been intentionally left blank Contents Officers and professional advisers 1 Business review and Directors’ report Business review Management review Financial review Internal controls and risk management Directors’ report 2 5 8 12 Directors’ responsibilities statement in relation to the financial statements 14 Independent auditors’ report 15 Group financial statements Group consolidated income statement Group statement of other comprehensive income Balance sheets Cash flow statements Statements of changes in equity Notes to the accounts Operating and financial statistics Fleet table Principal investments Glossary Subsidiary undertakings 16 17 18 19 20 21 79 80 81 82 83 British Airways Plc Officers and professional advisers Directors Sir Martin Broughton Alison Reed Keith Williams Nick Swift Andrew Crawley Frank van der Post Enrique Dupuy de Lôme Ken Smart Gavin Patterson Garrett Copeland Julia Simpson Secretary Kulbinder Dosanjh (Chairman) (Deputy Chairman) (Chief Executive Officer) (Chief Financial Officer) Registered office Waterside PO Box 365 Harmondsworth UB7 0GB Parent company International Consolidated Airlines Group S.A. Calle Velázquez 130 Madrid, 28006 Spain Independent auditors Ernst & Young LLP 1 More London Place London SE1 2AF 1 British Airways Plc Business review and Directors’......

Words: 42054 - Pages: 169

Premium Essay

Us Gaap vs Ifrs

........................................................................................................................................................ 8 Statement of financial position / balance sheet .............................................................................................. 9 Statement of comprehensive income / income statement ........................................................................... 12 Statement of changes in equity .................................................................................................................... 16 Statement of cash flows ............................................................................................................................... 17 Non-current assets held for sale and discontinued operations...

Words: 95644 - Pages: 383

Premium Essay

Pepsi Prospectus

...The prospectus is being displayed in the website to make the prospectus accessible to more investors. The Philippine Stock Exchange (PSE) assumes no responsibility for the correctness of any of the statements made or the opinions or reports expressed in the prospectus. Furthermore, the PSE makes no representation as to the completeness of the prospectus and disclaims any liability whatsoever for any loss arising from or in reliance in whole or in part on the contents of the prospectus. The offering information on this Web site is intended to be available only to Philippine and non-Philippine citizens residing in the Philippines or corporations or judicial entities organized and existing under Philippine law, and is not intended for distribution in the United States or to U.S. persons (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act")). The information contained in this Web site may not be published or distributed, directly or indirectly, into the United States and this information (including the preliminary and final Prospectus) and does not constitute an offer of Offer Shares for sale in the United States or to, or for the account or benefit of, U.S. persons. The Offer Shares described in the Prospectus have not been, and will not be, registered under U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States and may not be offered......

Words: 112816 - Pages: 452

Free Essay

Bala

...ž¸¸£·¸ú¡¸ ¹£{¸¨¸Ä ¤¸ÿˆÅ ____________RESERVE BANK OF INDIA________________ www.rbi.org.in RBI/2013-14/70 DBOD.No.BP.BC.2 /21.06.201/2013-14 July 1, 2013 All Scheduled Commercial Banks (Excluding Local Area Banks and Regional Rural Banks) Madam / Sir, Master Circular – Basel III Capital Regulations Please refer to the Master Circular No.DBOD.BP.BC.16/21.06.001/2012-13 dated July 2, 2012, consolidating therein the prudential guidelines issued to banks till that date on Capital Adequacy and Market Discipline - New Capital Adequacy Framework (NCAF). 2. As you are aware, Basel III Capital Regulations is being implemented in India with effect from April 1, 2013 in a phased manner. Accordingly, instructions contained in the aforesaid Master Circular have been suitably updated / amended by incorporating relevant guidelines, issued up to June 30, 2013 and is being issued as Master Circular on ‘Basel III Capital Regulations’. 3. The Basel II guidelines as contained in the Master Circular DBOD.No.BP.BC.9/21.06.001/2013-14 dated July 1, 2013 on ‘Prudential Guidelines on Capital Adequacy and Market Discipline- New Capital Adequacy Framework (NCAF)’ may, however, be referred to during the Basel III transition period for regulatory adjustments / deductions up to March 31, 2017. Yours faithfully, (Chandan Sinha) Principal Chief General Manager Encl.: As above Department of Banking Operations and Development, Central Office, 12th Floor, Central Office Building, SBS......

Words: 72826 - Pages: 292

Premium Essay

Singapore 09-10

...singapore airlines annual report 2009/2010 Singapore Airlines achieved a net profit attributable to equity holders of S$216 million for the financial year ended 31 March 2010. During the first half of the year, demand for air travel declined due to the global economic slowdown as well as the outbreak of Influenza A (H1N1). The Group recorded a net loss attributable to equity holders of S$466 million for the first half of the financial year. Despite the difficult times, the Airline did not lose sight of its commitment to delivering product and service innovation. Singapore Airlines continued to invest in its long-term future by flying its flagship aircraft, the Airbus A380, to more destinations, rolling out a cabin renewal programme for selected Boeing 777 aircraft, and opening a new service centre in the heart of Singapore’s premier shopping belt. Market conditions gradually improved in the second half of the financial year. Reflecting this, the Airline recorded higher passenger and cargo traffic. Together with the S$404 million net profit in the third quarter, the fourth quarter net profit of S$278 million reversed the S$466 million loss recorded in the first half of the financial year. The business outlook for the Group in FY 2010-2011 is encouraging, although the sustainability of the recovery depends on developments in the world economy and on business and consumer confidence. The Airline plans to increase capacity in a measured manner in the new financial year. This...

Words: 68860 - Pages: 276

Premium Essay

Marketing

...publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise, without the written permission of the copyright holder. Maharshi Dayanand University ROHTAK – 124 001 Developed & Produced by EXCEL BOOKS PVT. LTD., A-45 Naraina, Phase 1, New Delhi-110028 Qklhokn 3 Contents Chapter 1 Accounting-An Intoduction Chapter 2 The History and Evolution of Accounting Thoughts 23 Chapter 3 Approaches to Accounting Theory 56 Chapter 4 Accounting Postulates, Concepts and Principles 88 Chapter 5 Income Concepts 107 Chapter 6 Revenues, Expenses, Gains and Losses 139 Chapter 7 Valuation of Assets 158 Chapter 8 Liabilities and Equity 177 Chapter 9 Depreciation Accounting and Policy 192 Chapter 10 Inventories and their Valuation 238 Chapter 11 Financial Reporting 277 Chapter 12 Specific Issues in Corporate Reporting 302 Chapter 13 Harmonization of Financial Reporting 323 Chapter 14 Accounting for Price Level Changes 339 Chapter 15 Human Resource Accounting 397 Chapter 16 Financial Engineering: A Multi-Disciplinary Approach to Risk-Return Management 421 Chapter 17 Accounting Standards 429 Chapter 18 Elementary Knowledge of Indian Accounting Standards 474 Chapter 19 Lease Accounting 512 Chapter 20 Social......

Words: 237072 - Pages: 949

Premium Essay

Accounting

...P R E FAC E THE ACCOUNTING ENVIRONMENT Accounting is the most employable, sought-after major for 2009, according to entrylevel job site CollegeGrad.com. One reason for this interest is found in the statement by former Secretary of the Treasury and Economic Advisor to the President, Lawrence Summers. He noted that the single-most important innovation shaping our capital markets was the idea of generally accepted accounting principles (GAAP). We agree with Mr. Summers. Relevant and reliable financial information is a necessity for viable capital markets. Without it, our markets would be chaotic, and our standard of living would decrease. This textbook is the market leader in providing the tools needed to understand what GAAP is and how it is applied in practice. Mastery of this material will be invaluable to you in whatever field you select. Through many editions, this textbook has continued to reflect the constant changes taking place in the GAAP environment. This edition continues this tradition, which has become even more significant as the financial reporting environment is exploding with major change. Here are three areas of major importance that are now incorporated extensively into this edition of the text. A New Way of Looking at Generally Accepted Principles (GAAP) Learning GAAP used to be a daunting task, as it is comprised of many standards that vary in form, completeness, and structure. Fortunately, the profession has recently developed the Financial......

Words: 115901 - Pages: 464

Premium Essay

Santander Report

...Santander UK plc 2011 Half Yearly Financial Report Intentionally left blank Santander UK plc Half Yearly Financial Report for the six months ended 30 June 2011 Contents Chief Executive Officer’s Review and Forward-looking Statements Chief Executive Officer’s Review 2 Forward-looking Statements 5 General Information 5 Business and Financial Review – Interim Management Report Business Review - Summary 6 Business Review – Divisional Results 9 Other Material Items 18 Balance Sheet Business Review 20 Risk Management 39 Principal Risks and Uncertainties 110 Related Party Transactions 111 Gender Diversity 111 Board of Directors 111 Financial Statements Independent Review Report to Santander UK plc 112 Primary Financial Statements 113 Notes to the Condensed Financial Statements 117 Shareholder Information Risk Factors 152 Glossary of Financial Services Industry Terms 163 Directors’ Responsibility Statement 177 1 Business Review and Forward-looking Statements Chief Executive Officer’s Review Overview Santander UK has delivered profit in the first six months of 2011 maintaining its strong track record of profitability and balance sheet strength. In line with other UK banks, a further provision for payment protection insurance remediation has also been made, resulting in statutory profit after tax attributable to equity shareholders declining by 51% to £413m. Santander UK’s trading profit before tax was £1,142m, 2% lower than the first half of 2010,......

Words: 107007 - Pages: 429