Accounting Dissertations

Sample details Pages: 11 Words: 3168 Downloads: 8 Date added: 2017/06/26 Category Statistics Essay Did you like this example? Abstract The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) are reviewing their guidelines on lease accounting this year. This paper provides background information on the Securities and Exchange Commission (SEC), FASB and IASB including what their role is in accounting. It details the history of lease accounting for them, changes that have occurred since the original guidelines were issued, and why the FASB and IASB are looking to update the current standards. History and Future of Lease Accounting for Leases The history of lease accounting provides numerous changes to the standards. FASB 13 is the last major change that has been made and that was 30 years ago. The financial community describes the changes that could arise from the FASB and IASB as an effort to bring transparency to company balance sheets. This is a continuing reaction to Enron and certain happenings earlier in the decade that brought off-balance sheet items to the forefront. There is a lot of focus on off-balance sheet obligations now. Don’t waste time! Our writers will create an original "Accounting Dissertations | Financial Accounting Standards Dissertation" essay for you Create order Users of financial statements depend on the statements to provide important information about a companys performance, financial condition, and the cash flow. Financial statement users include bankers deciding whether to lend money or renew a loan to a company, suppliers deciding to extend you credit. The FASB and IASBs conceptual framework objective is to provide a common framework that provides useful and complete accounting information (Monson, 2001). Standard Setting Bodies Security and Exchange Commission The Security and Exchange Commission (SEC) was established in 1933 after the Crash of 1930. Prior to this time there, no standard setting body existed. Even after its formation, the SEC encouraged the private sector to set them. In 1934, the SEC received the authority to establish financial accounting and reporting for publicly held companies. Committee on Accounting Procedures In 1939, the SEC suggested that the American Institute of Certified Public Accountants (AICPA) create a formal standard setting body. The AICPA established the Committee on Accounting Procedures (CAP). During its reign from 1939 to 1959, they issued 51 Accounting Research Bulletins. CAP was not as successful as had been hoped. CAP only issued standards on problems as they occurred. These standards are known as Accounting Research Bulletins or ARBs. Accounting Principles Board The Committee on Accounting Procedures was replaced with the Accounting Principles Board (APB) in 1959. They issued 31 opinions and 4 statements over the next 14 years. They are credited with the development of Generally Accepted Accounting Principles (GAAP) from the opinions and statements they issued. Financial Accounting Standards Board The APB was replaced by the Financial Accounting Standards Board (FASB), which was formed in 1973. FASB is an independent board with full-time members who no longer work in private firms or their employers. FASB establishes standards for businesses in the private sector. As part of the FASB mission statement it states that, standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable information (Financial, 2007.). In Facts about FASB (2007), the FASB seeks to accomplish their mission by acting to keep standards current to reflect any changes in methods of doing business, to improve the usefulness of financial reporting by focusing on relevance, reliability, comparability, and consistency, and to promote the international convergence of accounting standards. International Accounting Standards Board The International Accounting Standards Board (IASB) established in 2001 is based in London. It succeeded the International Accounting Standards Committee (IASC), which was founded in 1973. The IASB develops a solitary set of global accounting standards that provide transparent and comparable information in financial statements. The IASB works with national accounting standards bodies to accomplish a united set of accounting standards to be used around the world. Original Standards for Leases ARB 43, Chapter 14 In 1949, the Committee on Accounting Procedures issued ARB 43, Restatement and Revision of Accounting Research Bulletins, Chapter 14 Disclosure of Long-Term Leases in Financial Statements of Lessees. ARB 43, Chapter 14 only provides guidance for leasing land and buildings. ARB 43 (1953) requires that the lessee assumes all the expenses and obligations of ownership, such as taxes, insurance, and repairs. These types of arrangements differed from conventional long-term leases but the principles of disclosure were intended to be applied to both types of arrangements. The disclosures that need to be reported included the amount of annual rent to be paid, the period for which the payments are payable. The disclosure is to be reported for the life of the lease not just the first year. In the first year of the lease, the disclosure needs to detail the transaction (FASB, 1953). APB Opinion No. 5 The Accounting Principles Board issued Opinion No. 5, Reporting of Leases in Financial Statements of Lessees in September 1964 and supercedes ARB 43, Chapter 14. Since ARB 43 had been issued, leases had been disclosed on financial statements but not in a consistent manner. The information disclosed was often not enough for investors to get a clear picture of a companys financial position. According to APB Opinion No. 5 (1967), there had been very few instances of capitalization of leased property and recognition of the related obligation. In Accounting Principles Boards Opinion No. 5, rental (lease) payments for services, property taxes, utilities, maintenance, etc. are to be treated as an expense. Having the right to use property and paying a specific rental amount over a period are not considered an asset or liability. An operating lease should disclose relevant information about the lease or rental agreement and the information disclosed will vary from one situation to another. Lessees were to disclose the minimum annual payments and length of time at the least. The maximum they should disclose was the type of property leased, the obligation assumed, requirements of the lease. APB No. 5 (1967) states a capitalized lease may require a note or schedule to disclose the details of the lease agreement. Lease arrangements that are similar to an installment purchase should be listed on the balance sheet and depreciated accordingly. For a lease agreement to be capitalized there should be material equity in the purchase. IAS 17 The International Accounting Standards Board (IASB) issued IAS 17, Accounting for Leases, in September 1982. A lease is classified either as a finance lease or an operating lease. A finance lease is classified as such if it transfers substantially all the risks and rewards (International, 2003) to the lessee. Leases are classified as an operating lease if they do not meet the criteria of a finance lease. The following situations would lead a lease to be classified as a finance lease: Transfer of ownership of the asset to the lessee at the end of the lease The lessee has the option to purchase the asset at an amount that is sufficiently lower than the fair value The lease term is for most of the assets life At the beginning of the lease, the present value of the minimum lease payments is equal to the fair value of the asset. (International, 2003) IAS 17 (2003) requires that the following accounting principles be applied to finance leases. The finance lease should be recorded as an asset and a liability, lease payments should be distributed between finance charges or interest expense and the principle amount of the liability, and depreciation should be calculated using the same method as that of the companies owned assets. The International Accounting Standards Board (2003) defines the disclosure requirements lessees of finance leases must follow. Lessees of finance leases disclose the carrying amount of the asset, reconciliation between total minimum lease payments and the present value, amounts of minimum lease payments as of the balance sheet date, and the present value for the next years, years 2 through 5 combined, and beyond 5 years and a general description of the lease arrangement. In section 35 of IAS 17, the International Accounting Standards Board (2003) provides disclosure details for lessees of operating leases. Lessees must recognize lease payments as an expense on the income statement. They should provide in the financial statement disclosure a description of the lease arrangement, including any provisions, whether there is a purchase option, and any restrictions that are imposed. Also, lease payments as of the financial statement date for the next year, years 2 through 5 combined, and beyond 5 years. Changes to Original Standards APB Opinion No. 31 The Accounting Principles Board issued Opinion No. 31, Disclosure of Lease Commitments by Lessees, on June 1972 with an effective date of January 1, 1974. Opinion No. 31 was developed because investors, grantors, and users of financial statements acknowledged that at the time the disclosures did not provide all the information they deemed important. The APB issued it to clarify and now require the disclosure requirements of APB Opinion No. 5. The Board did not want to establish any disclosure requirements because the FASB had placed leases as a subject on its agenda at the time this was issued. The Board was hesitant because they did not want to bias the decision. The Board reworded its requirements for the disclosures of operating leases. A lease that is for one year or more needs to provide the total rental expense. The minimum rental payments should be disclosed for each of the five succeeding years, each of the next three to five year periods, and the remainder should be listed as a single amount. Additional disclosures that should be included are whether the payments are dependent upon any factors other than time, if so what is the basis for calculating the payments, is there a purchase or renewal option, and any restrictions. (FASB, 1973) FAS 13 In November 1976, the Financial Accounting Standards Board issued FAS 13, Accounting for Leases. The issuance was to provide detailed criteria that other statements had supplied for classifying leases that would prevent many different interpretations. This statement superseded APB Opinion No. 5, Reporting of Leases in Financial Statements of Lessees and APB Opinion No. 7, Reporting of Leases in Financial Statements for Lessors. FAS 13 established standards of financial reporting for both lessees and lessors. The standard provided a definition of leases, how leases should be classified, and what needed to be disclosed. The Financial Accounting Standards Board (1976) defined a lease as an agreement conveying the right to use property, plant, or equipment usually for a stated period of time. This definition includes agreements that although may not be identified as a lease but falls under the definition. FAS 13 (1976) states that a lease is classified either as an operating lease or as a capital lease. Capital leases meet one or more of the criteria FASB established for a capital lease. The criteria for classifying leases as a capital lease are: The lease transfers ownership of the asset at the end of the lease term. The lease contains a bargain purchase option The lease is longer than 75% of the products economic life The present value of the lease is more than 90% of the asset value using the lessees incremental borrowing rate. (FASB, 1976) FAS 13 provided the following accounting principles that are applied when it is determined that a lessee is involved in a capital lease. The lessee records a capital lease as an asset and liability for the amount equal to the value of the lease payments. If the lease has a bargain purchase option or if the property transfers ownership at the end of the lease term, the asset is depreciated according to the lessees normal depreciation for owned assets. If the lease does not contain a bargain purchase option or if the property does not transfer ownership at the end of the lease, the asset is depreciated for the life of the lease. Leases that do not meet the criteria of a capital lease are classified as an operational lease and are treated as an expense for the term of the lease on the income statement. (FASB, 1976) Capital leases should disclose the gross amount of the asset and the future minimum lease payments. Operating leases should disclose the future minimum rental payment required, a general description of the terms of the lease agreement to include how the rental payments are determined, terms of renewal or purchase option, any restrictions that may apply. FASB and IASB to Update Lease Standards In July 2006, the FASB and IASB announced that it had added a leasing project to its agenda to reconsider all aspects of lease accounting. One reason for the project is to harmonize lease accounting standards with the IASB. The IASB and FASB currently have substantial differences in their treatment of leases; particularly notable is that the bright line tests of FAS 13 (whether the lease term is 75% or more of the economic life, and whether the present value of the rents is 90% or more of the fair value) are not used by the IASB, which prefers a facts and circumstances approach that entails more judgment calls (Open, 2006). Both the FASB and IASB have the finance and operating lease concept. However, their criteria are different for classification. Another reason is a request from investors and other authoritative bodies who have been criticizing that similar lease transactions were still being accounted for in different ways. In the SECs 2005 report in response to Sarbanes-Oxley the SEC stated that too many leases were being kept off the balance sheet. The commissions staff estimated that the standards allow publicly traded companies to keep an undiscounted $1.25 trillion in future cash obligations off their balance sheet (Leone, 2006). Therefore, the current accounting standards are failing to provide the necessary complete and transparent information. FASB and IASB hope to have an exposure draft available in 2009. Solutions There are two solutions to the lease problem. The FASB and IASB can either recommend leases to be reporting on a companys income statement only as an expense or on a companys balance sheet only as an asset and liability. Income Statement Only Using the income statement only solution, companies would report their leases as operating lease. An operating lease recognizes the lessees payments as rent expense or lease expense on the income statement. Balance Sheet Only Using the balance sheet only solution, companies report their leases on the balance sheet as an asset and liability. It will also allow for depreciation and interest expense on the income statement. Capitalization of all leases will bring previously unreported assets and liabilities onto the balance sheet Analysis When companies lease an asset, the way it is accounted for depends on whether it is categorized as an operating or capital lease. How a lease is categorized may be different for tax purposes then for accounting purposes. The GAAP standards and Internal Revenue Service can have different sets of criteria. According to IRS Revenue Ruling 55-540 the IRS is wary of lease arrangements used to accelerate depreciation deductions. The IRS has no general rule for leases and each case is decided on an individual basis. However, from decisions previous made the following factors indicate a sale instead of a lease. If the asset meets one or more of the factors, it is considered a sale NOT a lease. A portion of the payments are specifically allocated as interest or it is obvious that is what is intended. The title is transferred at the end of the rental term. The lessee may purchase the asset at the end of the lease term for a bargain purchase price. When a lease qualifies as an operating lease, there are major consequences for the net income or loss and the return ratios of that company. In general, both the operating and net income of the firm will be decreased and the assets and liabilities for the firm will be understated. Debt management ratios are important to creditors and stockholders. Creditors want to make sure funds are available to pay interest and principal and are therefore particularly interested in short-run coverage ratios. Stockholders are concerned about the impact of excessive debt and interest on long-term profitability. Lenders and investors use such ratios as debt to equity, current ratios, and return on assets to evaluate the credit risk of current or prospective businesses. Ratios are used to measure the effectiveness that a company uses its assets and to compare a companys current performance. As shown below in the comparison of ratios in an operating or capitalized lease, the financial ratios can be misleading just by reporting leases off the balance sheet. By reporting the lease of ABC Restaurant, Inc. (Figures 1-4) as an operating lease or ABC Restaurant, Inc. (Figures 5-8) as a capitalized lease, the companys financial statements are affected. The financial statements of both are identical except for the accounts that were affected by the relative lease. The financial statements are not as accurate as investors and lenders are demanding. The current ratio is a quick indication of whether or not the company will have the means to pay its bills during the next year. It is clear to remain solvent, a company must have at least as much money coming in as it has going out. The current ratio is .31 for the operating lease and .30 for the capitalized lease. A current ratio over 1.5 to 2.0 is generally required for comfort. The debt ratio for the operating lease is 1.68%. In comparison, the debt ratio for the capitalized lease is 1.64%. A high debt ratio is generally viewed as risky by lenders and investors. The debt to equity ratio equals -1.32 and their return on assets is 38.45%. In relation to the capitalized lease which had a debt to equity ratio of -1.40 and their return on assets is 34.05%. The effect of a capital lease on net income is different then that of an operating lease because capital leases are treated the same as if assets are bought by the company. The company is allowed to claim depreciation on the asset and the interest payments on the lease are a tax deductions. By reporting assets on the balance sheet, this provides an increased level of information to lenders. This is especially useful to lenders of non public business or the small (S Corporations) who elect to omit disclosures on the financial statements. When a company does this those who review their financial statements will be misled because there will be no evidence of a lease existing. The payments will be accounted for on the income statement as rent expense or lease expense. Thereby, reducing the net income of those companies income statements. The AICPA issues Statements on Standards for Accounting and Review Services. The FASB issues standards for the public. The process for both the AICPA and the FASB starts with deliberations that are open to the public; the proposed Statements are then issued as Exposure Drafts, which allows the public to comment on them prior to the final pronouncement issued. Many accountants issued their opinions on what they feel should be done about this 30-year-old standard. Conclusion Currently, the lease standards are outdated. Lease arrangements have evolved considerably over the past 30 years and the standards are outdated (Miller, 12). FAS 13 was suppose to force leases to be capitalized but it did nothing but help lease companies create more cunning operating leases. The misclassification of leases affects not only the balance sheet but also the income statement and cash flow statement.

Adhd Short For Attention Deficit Hyperactivity Essay

ADHD, short for—attention deficit hyperactivity is a neurodevelopmental psychiatric disorder in which the individual has real problems with attention control. The condition manifests several symptoms such as attention deficits, impulsiveness, and hyperactivity that is extreme for a normal individual of the same age. Many times the symptoms result in poor academic performance. On the reverse side, these individuals have the ability to â€Å"hyper-focus† on other things they find particularly interesting, thus causing them to excel in other areas of life. I believe this condition is widely misunderstood and underdiagnosed for that matter, especially in adults. Some people have a misconception that once a person with ADHD reaches adult hood that they grow out of the disorder, but this is simply not true. Many adults who have the condition have learned so well how to compensate their weaknesses that they are able to go through life for many years, or even their whole lives, without ever receiving treatment or help, leading them to suffer the negative side effects. ADHD awareness will help society to better deal with and accept these individuals, any help those who may not yet realize they are suffering from the condition, to receive life changing assistance. The disorder, if you would call it that, has long been studied by physicians over the centuries and recognized as containing actual symptoms. Although up until more modern times it hasn’t been seen as problematic. 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Tom Ang Free Essays

Tom Ang grew up playing the clarinet. His dream was to become the first clarinet for the London schools symphony orchestra. he never made his dream in the musical world so he turned to the world of Medicine. We will write a custom essay sample on Tom Ang or any similar topic only for you Order Now he stayed in the Nottingham medical school for 3 years before he decided that this wasn’t his passion either. he traveled to Hong Kong many years later and saw the beauty that he has never seen before. he then decided that this was his passion. to photograph the things people pass by everyday and to have a new world seen from right under our noses. He traveled to mexico to see not the poverty that is riddled throughout the land but to see the happiness that the families share even in the dark times. to show that it doesn’t matter how much money you have to care for your family but how much heart. In his trip to mexico he realized that people don’t want to always see the darker things in life that may seem interesting. he saw past the mirror that makes other people resilient and chooses to take pictures of the obvious things that others won’t see. Tom decided that these pictures are the ones that show true heart and are willing to break the boundaries of normal lifestyle and show the cultures of many other races and nations. he also visits New York in that same year and tries to show New York from the outside worlds perspective. this meaning the poverty that surrounds New York so that it seems similar to mexico and the other countries. he soon realizes that these people are not like the ones in his other photographs that these people are dangerous and are not fueled by heart and love but they are fueled by hate and greed. He tries to capture these pictures as best as he can but did not post many because he believed that they didn’t show the true feeling he felt when taking the photos and it doesn’t have the same effect if it doesn’t feel the same. At this point in time Tom started working with Fay Godwin as his assistant. he was asked if he knew how to print because that would be his basic job, and of course he responded yes. He claims that he was a total amateur and did not want to admit it because he needed the job. Yet for some reason she kept him on the team and trained him to become a better printer so he can print for her book and galleries. Tom traveled back to Hong Kong and took many more homescape photos while on his vacation there. Tom had upset a large nest of bees when photographing there. they attacked him very vigorously and sent him to the operating table. he says that his life could have ended right there. after his battle with the bees he traveled to japan in search of a dream boat that kept appearing every time that he would dream. he searched through all of japan taking pictures of boats so he could find it. but sadly this boat was never found. How to cite Tom Ang, Papers

The National Health Service Samples for †MyAssignmenthelp.com

Question: Discuss about the National Health Service in England. Answer: The National Health Service(NHS) is the oldest and the largest single payer health care system of the world, based in England. It is a publicly funded system for the citizen of England and is one among the four largest health care services in the United Kingdom. It provides healthcare facilities including dentistry, primary care, long term healthcare, in-patient care and ophthalmology to every legal resident of UK. The private health care system has continues parallel to the NHS since its emergence in 1948[1]. In this article about the excellencies of NHS over the private healthcare system. However, the things are no longer that easy in current days, as the differences between the private healthcare system and NHS are blurring with the passage of time but still there are minute key differences between them. It is very costly to have an intensive-care unit (ITU) in a healthcare system and as according to the recent data; around 90 percent of the total private hospitals in U.K have inadequate backup facilities for the intensive-care treatments. While in NHS specialist hospitals, they have excellent intensive care facilities and there is no need of routine procedures as well[2]. Although they are present in few specialist private hospitals in U.K but they often lack this. It is a known fact that if a patient becomes critically unwell in the private hospitals in England then they are likely to get transferred to the nearby NHS facility for their emergency care. In fact, if one requires a complex cardiac scan, the private hospitals may also refer him to the NHS for that test. So, what does these means? The NHS has many other specialist doctors that are global leaders in areas like cardiac, pediatric and cancer care[3]. According to the recent survey, people all over the world fly in to U.K i n order to get treatment under these doctors in the NHS yet they are frequently ignored and overlooked by the U.K private hospitals. With the same, the patients in the NHS are seen quicker and are treated with better food. It has always committed to provide a high level of training to its staffs and as a result they are dedicated in applying high standards of care to the patients[4]. According to the recent information, NHS holds the top position in the healthcare survey study of the Washington based foundation. It had also been declared as the best healthcare system by the international experts. They rated its service superior to other countries which spent way more on health[5]. With the same, the Commonwealth fund has also rated it number one for providing access to good care and for effective use of resources. Hence, it can be said that local private hospitals may not be the best place to be treated. The cost is the primary reason why most of the people in England prefer NHS over the private hospitals. NHS is pocket friendly. There are only few healthcare system like NHS who are totally publicly funded[6]. The patient's here are treated as according to their need and illness rather than their ability to expend. Each patient are treated under advanced medical technologies, up to date medicines and resources. It provides cost-free treatments to millions of patients per year while the price of private healthcare system largely varies depending upon the patients level to cover or whether they makes the use of pay as you go option. The NHS system are there in order to make money for itself but they are not a profit making organization in a true sense. They often offer treatments either, free of cost or at a lower cost as compared to the private hospitals of U.K.[7]. For example, most of the women in U.K gives birth to their babies, supported by the free NHS care. The NHS midwives prov ides the antenatal care according to the recommended schedule of the appointments. However, few of the women choose to pay for all the provided facilities but most of them do not pay for any care including the scans and blood tests. At the Same time, they also allow their patient to enjoy the benefit of private rooms and consultant-led healthcare facility. Private midwife for the antenatal care are present in the private health care centers as well but still women in U.K prefer to go for NHS birth care. Since the year 1948, NHS has not only served the U.K patients but it is also successful in saving the lives of millions of people all around the world. Hence, from the above analysis it could be stated that NHS is the best and most effective healthcare system and the primary reasons behind it are clearly stated above. The main reason behind the top position of NHS in the Commonwealth fund is based on the fact that it is completely a publicly funded organization[8]. Through its large network of organization, NHS gives the value for money. It grants a fair and impartial access to care. In addition to that, it is adjustable to this changing field of medicines. Though the organization is facing many challenges in the recent years, it has proven itself to be the best healthcare system not only in U.K but for the entire world population. It has the potential to provide its future patients a world-class healthcare facilities, if only it is funded well enough. Hence, there is no doubt that i t is better than any other private hospitals in U.K. References Beckert, Walter, Mette Christensen, and Kate Collyer. "Choice of NHS?funded Hospital Services in England."The Economic Journal122.560 (2012): 400-417. Choices, N. H. S. "About the NHS." (2013). England, N. H. S. "NHS ENGLAND."Evidence review: pasireotide for acromegaly as third-line treatment (adults). Dost?p: https://www. engage. england. nhs. uk/consultation/clinical-commissioningwave4/user_uploads/a03x11-pasiretd-evidnc-rep. pdf (28.12. 2016)(2016). Khalil, Modar, et al. "Prospective analysis of the use of OnabotulinumtoxinA (BOTOX) in the treatment of chronic migraine; real-life data in 254 patients from Hull, UK."The journal of headache and pain15.1 (2014): 54. Patel, V., et al. "Near?total mandibular reconstruction in the absence of microvascular grafts."Oral Surgery9.4 (2016): 215-221. Ray, Sumantra, et al. "Nutrition education and leadership for improved clinical outcomes: training and supporting junior doctors to run Nutrition Awareness Weeks in three NHS hospitals across England."BMC medical education14.1 (2014): 109. Secretary of State for Health, ed.High quality care for all: NHS next stage review final report. Vol. 7432. The Stationery Office, 2014. 'What's So Good About The NHS? | FUND OUR NHS' (FUND OUR NHS, 2017) https://nhsfunding.info/cure/can-we-afford-the-nhs/ accessed 13 November 2017