The historical cost accounting convention. - 2253 Words

INTRODUCTION Realised-profit, matching-based, historical cost accruals accounting (HCA) has for over fifty years been repeatedly challenged as being an inadequate basis for the measurement of income which reports increments in the value of businesses. Such challenges continue unabated and are made by both accounting standards regulators and by academic commentators. Despite its obvious deficiencies for measuring valuation based income, and subject to concept of prudence, internationally HCA remains the dominant basis for reporting and share prices appear to be influenced by reported earnings. This paper will go through few criticisms of our standard accounting model, look at possible alternatives and finally will provide a detailed†¦show more content†¦Opportunity costs are commonly used in economics and do not have much relevance here, however accounting bodies and academic commentators have forwarded new methods of accounting using the current asset value, as opposed to the conventional acquisition cost. Replacement costs could be used as a possible alternative to historical cost method. In crude terms Replacement costs (RC) may be defined as the estimated amount that would have to be paid in order to replace the asset as the date of valuation (Page 46,Lewis Pendrill, 2000). An advantage of replacement cost is that it focuses on the services the asset will provide rather than the precise physical asset. It therefore excludes speculative gains that might be made from selling a building to a purchaser who will redevelop it for an alternative use; equally it allows valuations to reflect the use that the current owner can make of an asset, even if a purchaser would not be able to employ the asset as profitably. However there is an immediate flaw noted in its definition, where the costs have to be estimated. Estimation has to be carried out after reviewing the asset, the market, and if an identical asset is still being traded in the market. Further difficulties inherent in the estimation are noted when the asset in the market is either not identical or obsolete. In these cases usually the replacement costs are much higher.Show MoreRelatedAdvantages and Disadvantages of Hstorical Cost Accounting1241 Words   |  5 PagesHstorical Cost Accounting Advantages and disadvantages of historical cost accounting, alternatives to historical cost accounting 2.1 Introduction Accounting concepts and conventions as used in accountancy are the rules and guidelines by which the accountant lives. The historical cost accounting convention is an accounting technique that values an asset for balance sheet purposes at the price paid for the asset at the time of its acquisition. The historical cost accounting is the situationRead MoreAccounting Concept and Conventions1685 Words   |  7 PagesACCOUNTING CONCEPT AND CONVENTIONS In drawing up accounting statements, whether they are external financial accounts or internally-focused management accounts, a clear objective has to be that the accounts fairly reflect the true substance of the business and the results of its operation. The theory of accounting has, therefore, developed the concept of a true and fair view. The true and fair view is applied in ensuring and assessing whether accounts do indeed portray accurately the businessRead MoreAccounting Research: Advantages of Cash Flow1720 Words   |  7 Pagesdependent on accounting conventions and concepts/principles * Cash flow reporting satisfies the needs of all users better since cash flow is more direct with its messages. Some of the interested user parties are: * Creditors   -repayment of debts, overdue accounts * Management -cash flow reporting provides the type of information which decision should be taken re: relevant costs ( decision based on future cash flow) * Shareholders amp; Auditors -cash flow accounting and reportingRead MoreThe Use of the Historical Cost Convention and the Accrual Concept for Stewardship and for Decision Making2814 Words   |  12 PagesPaper on:- â€Å"The use of the Historical Cost convention and the accrual concept for stewardship and for decision making† Topic 1: The Historical Cost Convention Introduction The historical cost convention is unarguably one of the most debated topics in the theoretical base of accounting. Some are of the opinion that it should be done away with, while others believe that it plays a vital role in presenting an accurate picture of the business concern. The Historical cost convention has different uses andRead MoreThe principle of historical cost is still used in accounting when there is a large measure of agreement that it is inappropriate. Discuss.1226 Words   |  5 PagesSynopsis. Historical Cost Accounting is a traditional valuation method as it reflects only on the past cost of the asset, however in the contemporary business environment companies must remain flexible and transparent. This belief has lead to the creation of several other valuation methods, due to word constraints I have focused primarily on Fair Value Accounting as an alternative to Historical Cost Accounting. Although Fair value accounting is a theoretically superior valuation methodology, thereRead MoreAccounting Concepts, Conventions and Solutions3647 Words   |  15 PagesContents QUESTION ONE: Accounting Concepts and Conventions 1 a) Accounting Concepts 1 i) The going concern concept. 1 ii) The accruals concept (or matching concept) 1 iii) The entity concept: 3 iv) The money measurement concept: 3 v) The historical cost concept: 4 vi) The realization concept: 4 vii) Duality concept: 4 b) Accounting conventions 5 QUESTION TWO: Clashing accounting concepts and conventions that might bring about inconsistency in the accounting process 9 1. Clash betweenRead MoreEssay about Discuss the Need for Regulation in Financial Reporting1524 Words   |  7 Pagesfinancial reports in different ways. There are international differences in accounting practices. Accounting practices differ from country to country and so do the regulatory frame work and the balance between the public and private regulation. Over the years, bodies like the EU have been formed. There is need for accounting regulation as all these different countries coming together may have different accounting standards, thus there will be the need for financial reports regulation. In the Read MoreEffect of Accounting Concepts on Financial Statement1735 Words   |  7 PagesTHE EFFECTS OF ACCOUNTING CONCEPTS ON FINANCIAL STATEMENT 5.1 ENTITY CONCEPT The first accounting concept is entity concept. These concept shows accounts are kept for entities and not the people who own or run the company.   Even in proprietorships and partnerships, the accounts for the business must be kept separate from those of the owners. This is because what whatever amount the company owes to others is not the liabilities of the owners. The maximum amount that the owner is going to loseRead MoreDo Financial Statements Tell the Truth?1736 Words   |  7 Pagesnot have bought the stuff if we didn’t think it was going to generate more cash than it cost us.) However, even if our firm’s managers are honest and competent, allowing them to conjure instant profits with optimistic estimates of asset values might tempt corruption. Potential investors might be reluctant to rely on statements compiled this way. In the United States, firm assets are initially valued at â€Å"cost†. Very simply, we say an asset is worth whatever a firm paid for it. For our machinery,Read MoreEssay about Measurements in Accounting: Finacial Reporting578 Words   |  3 Pagesin financial statements, which are historical cost, current cost, realisable (settlement) value and present value. Fair value is not included in the measurement bases, but it is a widely used basis now, and it will be discussed with other measurements as below. 2.2 Measurement Bases ï‚ž Historical cost shows a prudent attitude to measure the past performance and net assets which are actually incurred. It is reliable when based on actual transactions. ï‚ž Current cost, just as its name implies, shows

Organizational Culture And Performance By Kotter And Heskett

Organisational culture refers to a diverse system of shared values, principles and behaviors that influence the behavior of employees in organisations. Organisations exist to achieve certain goals, ranging from profits and reputation to efficient work practices and an efficient working environment. The culture of an organisation has a strong influence on employee behavior and organisational performance and is therefore the catalyst which determines the success or failure of an organisation. As stated by Kotter and Heskett in their book ‘Corporate Culture and Performance’ â€Å"strong corporate cultures that facilitate adaptation to a changing world are associated with strong financial results† (2015). The true value of a company is no longer determined by looking through financial statements. In the 21st century, a strong organisational culture is viewed as an intangible asset through its ability to improve performance and the success of the organisation. However, in an organisation with a weak organisational culture, it can be viewed as a liability that possesses the potential to hinder business performance and success. There are three levels of organisational culture that enforce its presence. The first layer of organisational culture refers to that of assumptions. Assumptions are usually taken for granted yet reflect beliefs about desires, practices and reality. They are the fundamental components on how an employee determines the right behavior and feels about his job andShow MoreRelatedOrganizational Culture And Human Behavior1323 Words   |  6 Pages2014). A major factor of a project’s success is the behavior of the employees. Employee behavior is influenced by organizational culture and leadership. This paper will briefly explore the influence organizational culture and human behavior have on the success of projects, in particular projects plagued with conflict. First, this paper will discuss the influences organizational culture has on the success of projects. Secondly, the role project leadership plays in the success of projects and how projectRead MoreLiterature Review on Corporate Culture1878 Words   |  8 PagesManagement Literature Review â€Å"During the 1980s the concept of corporate culture captured the imagination of management researchers and practitioners alike. In particular, Peters and Waterman’s (1982) book entitled In Search of Excellence: Lessons from America’s Best-Run Companies proclaimed that the key to corporate success was a strongly unified corporate culture.† Wilson (1996:87) Corporate culture has always been a part of every business since it was first introduced in the 1980’s. It doesn’tRead MoreThe Effects Of Managerial Strategies On Organizational Efficiency1924 Words   |  8 PagesStrategies on Organizational Efficiency Mary Curran, Shannon, Gasper, Rexford Sirmans PAD3003 Spring 2016 Group Project The need for administration and management to focus on managerial strategies is paramount within an organization. The potential impact these strategies may have on an organization are extraordinary. Managerial strategies and organizational cultures impact decision making and organizational performance. Management strategies shape and define organizational culture, which inRead MoreThe Current Business Environment Is Characterized By Hyper Competition3248 Words   |  13 Pageswith internal and external organizational constraints. There are also the issues of globalization, government regulations, advances in technology together with an ever changing customer needs and requirements. Creating and sustaining competitive advantage have thus become a major business challenge (Schein, 1992). Corporate or organisational culture that fits the business environment enables competitive advantage as an organization benefits from its culture. Corporate culture could also be related toRead MoreThe Impact Of Japanese Culture On Corporate Culture792 Words   |  4 PagesIn the early 1980s the term â€Å"corporate culture† was developed and broadly known by the 1990s. The trend began with two books that examined the challenges that Japan posed for American industry, Theory Z (Ouchi 1981) and The Art of Japanese Management (Pascale and Athos 1981). The trend continued with two books that concentrated closely on American industry, Corporate Cultures (Deal and Kennedy 1982) and The Change Masters (Kanter 1983), and surpass to perhaps the book that best exemplifies thisRead MoreMarket Based Management1727 Words   |  7 PagesGrade on Assignment: Instructors Comments: Introduction The Market-Based Management philosophy was developed by Charles Koch 25 years ago while working in Koch Industries. The basic idea of the Market Based Management rely in improve organizational performance and profitability by applying free market principles by allowing employees to act on their own knowledge. Also, MBM allows organizations to evaluate the tools of total quality management and other ideas in order to mobilize the knowledgeRead MoreTo What Extent Can Organisational Culture Be Managed? Is It Critical to Organisational Success?3488 Words   |  14 PagesTo what extent can organisational culture be managed? Is organisational culture critical to the success of an organisation? Peter Anthony (1994) asserts that the pursuit of change in a cultural sense has been considered synonymous with the pursuit of excellence for organisations. It is true that a wide variety of management practitioners view the control of organisational culture as something both possible and necessary for organisational success (Brown 1993). A survey of organisational practicesRead MoreDialogue As A Form Of Communication1073 Words   |  5 Pages (William Isaacs, past director, MIT’s Dialogue Project) The work dialogue stems from the Greek roots ‘dia’ and ‘logos’ which means â€Å"through meaning†. Dialogue serve as a great part in bringing a drastic change in the organisational culture of the companies on my levels. David Bohm s (1996) popular book, On Dialogue, defines dialogue as a form of communication from which something new emerges; participants must evidence a relaxed, non-judgmental curiosity, with the aim of seeing thingsRead MoreThe Importance of Corporate Culture in International Market5157 Words   |  21 PagesPaschaloudis-Haidos-Pantelidis- Anastasiadou-Dapis, 656-667 â€Å"The Importance of Corporate Culture in International Market: The case of Procter Gamble† Dr D. Paschaloudis, K.Anastasiadou Technological Educational Institute of Serres Department of Business Administration, Greece dim@teiser.gr, ak@teiser.gr S. Haidos University of Sunderland, Business School U.K stefhai80@yahoo.gr Dr P. Pantelidis Technological Educational Institute of Serres Department of Business Administration, Greece pantelidis@cRead MoreA New Way Of Looking At Employee s Job Attitudes Or Behaviors1304 Words   |  6 Pagesachievers in need quality since managers and leaders who are diverse to expanding their development won t understand any physiological responsibilities. (Greenberg Baron 2003, p195). Furthermore, Influence over power is indispensably vital to the organizational character. Having power implies more grounded employer stability and better monetary rewards, and having the capacity to impact others all the more effortlessly and perform out one s occupation all the more practical (Magee Galinsky 2008).

The Impact of genetic fingerprinting and gene profiling in Forensic Science Free Essays

Gene profiling and genetic fingerprinting was unheard of in Forensic Science 20 years ago. DNA testing was initially introduced in the 1980s and the first court case, which saw a man put behind bars due to the forensic evidence was in 1985. Following the success of the use of physical proof, numerous cases around the world from paternity tests to identification of American soldiers from the Vietnam War have been solved. We will write a custom essay sample on The Impact of genetic fingerprinting and gene profiling in Forensic Science or any similar topic only for you Order Now A person’s DNA (de-oxyribonucleic acid) can be found from a single strand of hair, skin under a murder victim’s nails or bodily fluids such as sweat, saliva, semen and blood. The chances of a sample of DNA being the same as another person, other than monozygotic twins is 1 in 24 million. This is why recent cases such as that of Sarah Payne rely so much on DNA samples found at the crime scene. In this case a single strand of Sarah’s hair was found on Roy Whitting’s sweatshirt and matching fibres from his sweatshirt were found on her shoe, although there was slight controversy as to whether the evidence was contaminated. The method for extracting the DNA from a sample is a complex one. The technique was first developed in this country in 1985, the year of the first proven case. Firstly the DNA must be extracted from the sample of body tissue or fluid. This could be a very small amount in a criminal investigation where the offender could’ve taken every precaution to avoid being caught. A process called Polymerase Chain Reaction (PCR) then multiplies the sample and produces millions of identical strands of DNA. PCR is completed by a â€Å"repetitious, cyclic programme of heating and cooling the substance together with a heat resistant DNA polymerase and two specific DNA primers. The polymerase and primers reproduce a small region of a genome, the whole of the DNA of the organism.† – quoted from DNA in Forensic Science by J. Robertson, A.M. Ross and L.A. Burgoyne. Forensic scientists use PCR to produce plenty of DNA to carry out all the necessary experiments to obtain a conclusive result. The DNA is then broken up, using enzymes, into standard fragments. The enzymes used cut the DNA at precise sequences of A C G and T in the DNA. A few fragments are then chosen and separated by size on a gel. The gel is then exposed to radioactive samples of the DNA. This produces different sized bands and the bands that have the same sequence of DNA are prominent. Generally the DNA evidence found at the scene is tested and the suspect may have a blood test or a saliva sample from the inside of the cheek, which will also be tested. The two samples will be tested and compared several times. If the two samples have 5 bands or more that match the result is considered as decisive. In 1992, after many years of arguments for and against the gene profiling, the National Research Agency accepted the method as a reliable one to help identify criminal suspects and shortly after the procedure entered the mainstream court system. Genetic fingerprinting is now so common it’s difficult to avoid in everyday society. The accuracy of gene profiling is very good. The chance of two people sharing one band of DNA is approximately 1 in 30. This may not seem like there is much chance of identifying a person, as there is a fairly high possibility of it being a number of people. However, the National Research Agency has a policy stating that at least 5 bands have to match for the test to be considered as positive. This means that the probability goes from 1 in 30 to 1 in 30 x 30 x 30 x 30 x 30, which is equal to 1 in 24 million providing the two samples aren’t from blood relatives. This is why genetic fingerprinting is considered as firm proof in a court of justice. Overall, the chance of getting a DNA test wrong is slim, providing the tests are carried out properly. However, just because someone’s DNA is found at a crime scene doesn’t prove that the suspect is guilty. There are many other areas of law that need to be investigated before a verdict can be decided. Some offences that are committed rely almost solely on forensic evidence such as that of rape. If semen is discovered and recognized as that of the suspect then that is nearly a conclusive result. The suspect may claim that the other party consented to sexual intercourse, but would find it difficult to deny that intercourse took place. Nevertheless, forensic evidence does have its problems. Firstly the tests have to be carried out in fully sterile conditions to ensure that the DNA isn’t distorted in any way. It is crucial that the sample before PCR takes place is not contaminated as PCR will produce several thousands of exact clones and all the forthcoming tests could be inaccurate. Also, over time mutation of a sample takes place, gradually decreasing the likelihood of identifying a suspect perfectly. There have been experiments carried out to test how quickly mutation takes place. Scientists have found that, with blood and semen stains kept at room temperature for more than four years, it was almost impossible to identify any reliable DNA information due to mutation. In some cases, such as rape, the evidence can disappear within a matter of hours. When testing for semen in a rape case, the DNA should be found within 20 hours of the crime. Following the first 20 hours, the probability of obtaining an accurate identification decreases hour by hour. Conclusion With the slim chance of 2 people’s DNA making a full match, gene profiling is a definite way of proving whether a person was at a crime scene or not. Whether they actually committed the crime is a different matter. Providing all tests are carried out well and the DNA is extracted properly and without contamination then the results should be extremely accurate. On the whole, gene profiling has taken forensic science that stage further and it has developed to being a crucial part in identifying criminals all over the world. There remain ethical difficulties which have yet to be resolved, for example, the establishment of a DNA database, human rights and civil liberties, the use of DNA information in unrelated legal cases, etc, but these issues will be addressed in due course. How to cite The Impact of genetic fingerprinting and gene profiling in Forensic Science, Papers

Japanese companies running out of excuses - myassignmenthelp.com

Question: Discuss about the Japanese companies running out of excuses. Answer: After the heady days of the US and global financial meltdown of 2007/2008; the UAW allowed some manufacturers to introduce two-tier wages with the aim of lowering production costs and to spur growth in the depressed automotive sector . Apart from helping save the auto makers, the system has helped spur a growth in jobs in the industry, with hitherto closed factories being opened and creating job opportunities for the unemployed, even if the entry wages are nearly half that of tier 2 employees (Lee, 2011). The two-tier systems has helped create jobs and spur the growth of jobs in the US Auto industry Inevitably, the two-tier wage system raises concerns due to the wide wage disparity between new and established workers; this is more of a social issue than an economic one. Viewed through the prism of economics, the two-tier wage system is sustainable, especially in the short to medium term; this is because it makes sense to have more people productively employed, gaining crucial skills while helping automotive workers balance their books and regain profitability that can guarantee even the entry level workers earning less a job and stable income in the future. In the short and medium term, the system has been very successful (Wernle, 2014). In the longer term, however, it will not be sustainable, especially from a social angel because as the FIAT CEO has argued, it is likely to create resentment and two classes of workers within the same factory. Talking of its sustainability, the answer is yes and no; yes because from a purely economic angle, it will be acceptable for unemployed p eople to accept jobs at a lower wage rate than remain unemployed. Some of the drawbacks to two tier wage systems is obvious resentment from those paid less and problems with unions of equal pay for equal work. It will also help the auto makers lower costs and gain profitability, and this will lead to expansion and opening of new plants that will increase employment. Meanwhile, the entry level employees will eventually move to the established employees rank and earn more wages. Elsewhere, it has been successful, tied to the seniority system that has long been a tradition in Japanese companies (White, 2018). The concerns of the FIAT CEO are justified by social factors, where eventually, there will be resentment and class issues based on wages that can adversely impact productivity and cooperation among staff: this is why Marchionne thinks it will create two classes of workers. Some drawbacks of the system is that it will be complicated in the long term when auto makers become profitable and have to negotiate wages with the UAW. These are legitimate concerns; experienced workers in the lower wage bracket are likely to seek greener pastures, disrupting their current employers, so in the long t erm, the system as presently implemented is NOT sustainable: what is required is its evolution to something better Using non GM workers may be economically sound but social unsustainable; based on the Hierarchy of needs and sociological functioning, employees seek loyalty from employers and vice versa. While it may work in the short term, it is unsustainable in the medium to long term: this would be Marchionnes thoughts about the approach, it still will create resentment as well. The two-tier system will go away in the near future, with the most likely scenario is for it to evolve, say to be used for interns rather than full time employees. Union pressure, and worker demands for equal pay for equal work will eventually see its disbandment, or at the very least, its evolution (Chen, 2011) References Chen, L. (2011).Two-Tier Wages Are Likely to Evolve - NYTimes.com. [online] Nytimes.com. Available at: https://www.nytimes.com/roomfordebate/2011/09/18/can-detroit-sustain-its-two-tier-pay/two-tier-wages-are-likely-to-evolve [Accessed 23 Feb. 2018]. Lee, D. (2011).Two-tier pay system brings reopening of GM plant, reviving hope. [online] LA Times. Available at: https://articles.latimes.com/2011/dec/18/business/la-fi-economy-wages-20111218 [Accessed 23 Feb. 2018]. Wernle, B. (2014). Why mess with 2-tier wage success?. [online] Automotive News. Available at: https://www.autonews.com/article/20140526/OEM02/305269987/why-mess-with-2-tier-wage-success%3F [Accessed 23 Feb. 2018]. White, S. (2018).Japanese companies running out of excuses not to raise wages. [online] Japan Today. Available at: https://japantoday.com/category/business/Japanese-companies-running-out-of-excuses-not-to-raise-wages [Accessed 23 Feb. 2018].