ACC514: Financial Accounting - Report Accounting Assignment Help

Internal Code: MAS588

Report Writing Assignment:

Introduction: Financial Accounting is a part of accounting section which uses standard procedures to track business transactions. These financial recordings get evaluated and presented in the manner that the international standards demands (Dean & Schwindt, 1981). These manners of presentation include financial statements such as final accounts statement or balance sheet. These reports are configured to be an external source of a company’s financial state to the shareholders. There are various rules and standards regarding financial accounting that are followed by numerous scholars (Gaffney, Woodford , Mills, 1994). But there are some worldwide accepted rules known as generally accepted accounting principles. These principles are the consolidated form of all the accounting related principles those are widely accepted by everyone. Question: For the reporting period ending in 30 th June’15 Boots Ltd is settling the financial statements required. On 20 th September few situations came into notice, and here are the required responses to these situations according to AASB 110, assuming all the Values are material for the financial statement principle. 1) As the factory in Sydney destroyed by natural calamity on 10 th July’15 and the carrying amount is $600,000 already in the draft financial statements. The factory was insured for the same amount. But the company is expecting to receive the money in the next accounting period, which is in October 2015. So, according to IAASB 110 section 22 the destruction of a major plant or asset is a non-adjusting event, which means that the event do not have any effect over the financial report of 30 th June (AASB 110, 2007). Any adjustment regarding the insurance should be made on the next financial years report. The event should be at disclosure. 2) This parts states that the financial cost of inventory that was imported was calculated on 12 th July’15. But the items were received in June’15 and costs were assumed. The new cost is lower than the previous assumption (AASB 110, 2007). This is an adjusting event after the end of the recording period. The inventory should be adjusted to the new information and reduced by the $200,000. 3) Smith Ltd indicated on 15 th July’15 that the company was bankrupt. The company owes to Boots Ltd by $45,000. According to IAASB 110 this is an adjusting event (AASB 110, 2007). The receivable amount is needed to be adjusted as impairment loss of receivable. 4) This section suggests the plant and equipment have been depreciated lower than the actual amount. And it also suggests that the manager did the calculation with an intention to fraud. So according to IAASB 110 section 9 (e), any such incident should be recorded as adjusting events (AASB 110, 2007). The carrying value of the relevant plant and equipment item should be adjusted to the audited recoverable amount that is $1,500,000.