Assignment detailsyou are the financial accountant for a

Reference no: EM13376130

Assignment Details

You are the financial accountant for a mid-sized company and you have been briefed on a meeting that has taken place last week. In that meeting the marketing department discussed the merits of joining a network involving a virtual currency to promote business. In the meeting
the adoption of Bitcoin (a very popular virtual currency) and Emoney were discussed, however due to the security issues, the idea of adopting Bitcoin was dismissed.

The way the virtual currency Emoney works is via a network of suppliers and clients through the network "ENet" and the use of "Emoney". Emoney is the virtual currency that is used to transact within the network. 1 unit of Emoney is equal to 1 Australian dollar.

Each time a company that is within the ENet network provides a good or service to another member within the Network, the value of the service is recorded in "Emoney" and is added to the company's Emoney balance. This value of Emoney can then be exchanged for goods and
services provided by companies within the network and the balance updated accordingly.

There is no active market for Emoney, it has no physical substance and cannot be exchanged for cash. The major advantage of using Emoney is transactions within the network are cashless and it is being used to promote the strengthening of business amongst members within the network.

As the financial accountant you have been asked about the impact this will have on the financial position of the business, any risks involved and how the virtual currency should be recognised from an accounting point of view by writing a report for the Chief Financial Controller (CFO).

Required:

Write a 750 - 1000 word report that addresses the following criteria:

1. With reference to the Framework for the Preparation and Presentation of Financial Statements (Conceptual Framework) justify whether Emoney satisfies the definition and recognition criteria of an asset.

2. With reference to any appropriate accounting standards justify what is the correct initial accounting treatment for recording the value of Emoney.

3. Upon initial classification discuss the subsequent accounting treatment with respect to the initial classification.

4. Discuss any risks associated with the recognition of Emoney and the relevance this has for the accounting treatment.

Reference no: EM13376130

Questions Cloud

Sand mell and rand are partners who share incomes and : sand mell and rand are partners who share incomes and losses in a 145 ratio. after lengthy disagreements among the

Case study question 1read headline health rates as top : case study question 1read headline health rates as top social issue. would you expect management to worry about

Straightforward computation of overhead variancesthe : straightforward computation of overhead variancesthe following data are the actual results for marvelous marshmallow

Centcom inccentcom inc a telephone company entered into an : centcom inc.centcom inc. a telephone company entered into an agreement to manage britel a telecommunications company

Assignment detailsyou are the financial accountant for a : assignment detailsyou are the financial accountant for a mid-sized company and you have been briefed on a meeting that

Acme manufacturing company of portland oregon has a : acme manufacturing company of portland oregon has a research amp development department that currently provides

Topic a number of corporate failures took place in : topic a number of corporate failures took place in australia and united states between 2000 and 2002 causing major

Topic 1 ethics and budgetingbudgeting is generally regarded : topic 1 ethics and budgetingbudgeting is generally regarded as an essential technique for planning and controlling an

1 the globalization of business activity has resulted in : 1. the globalization of business activity has resulted in which of the following?a.nbsp increased corruption and

User Account

All Pages