User Account

All Pages

What do you think about the statement

Assignment Help Accounting Basics
Reference no: EM132741121

Question: Company A reports under IFRS and capitalises certain development costs as mandated by IFRS. The company is in steady state and the amount invested in development is roughly the same every year. In the manager's opinion:

Capitalising development costs is hurting us. Although our net income is unaffected by this accounting policy, our assets are higher. Investors assessing the company may wrongly conclude that we do not utilise our assets very efficiently since our asset turnover (= revenue/assets) is affected by capitalisation."

What do you think about this statement? Is the manager right? Explain your answer.

Reference no: EM132741121

Questions Cloud

Identifying and analyzing financial statement effects : Identifying and Analyzing Financial Statement Effects of Cash Dividends. On March 15, 2018, Bank of America issued 94,000 shares of 5.875% Fixed-to-Floating.
Explain your intended approach to auditing completeness : You have also been asked to take the lead on auditing the accrued warranty account for Manitoba. This account balance estimates the future warranty costs to be.
What is the year 2 depreciation amount : Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $16,000 for the truck. The truck is expected to have a $3,500 residual value.
How would you characterize the project assets : How would you characterize the project assets and operating environment of capline corporations? Is a project finance structure appropriate - why/why not?
What do you think about the statement : Company A reports under IFRS and capitalises certain development costs as mandated by IFRS. The company is in steady state and the amount invested.
What was diluted earnings per share : For 2010, the Seeger Corporation reports net income of $600,000. The company has 300,000 shares of common stock outstanding throughout the current year.
What was the markup on retail : A fire destroyed most of the inventory of a furniture store. Before the fire the records showed the following: Sales to date of the fire $460,000.
Calculate the cost of acquisition of the land : X Ltd, a listed company, acquired land from Y Ltd by issuing 100000 new shares in the company to Y Ltd. X's shares were trading at $4.6 per share at the date.
Prepare the journal entry to record the initial investment : Petersen Stores invested in $100,000 face amount of 4-year bonds issued by Erik Food Supply Company on January 1, 20X1. The bonds were purchased at 98.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd