Finance and Accounting Essay Example | Topics and Well Written Essays - 1500 words

finance and Accounting - Essay ExampleThe companies compliance with IFRS standards can effectively help predict the future fiscal outcomes and reduce irresponsible cosmetic accounting practices. The high societys compliance with all internationalistic m acetary account Standards will translate to better prediction of forecasting future business outcomes. For example, the compliance with standards requires that the political party present the historical sales amount s for the past two years. If the sales for 2010 is $ 250,000 and sales for 2011 is $295,000. every keen pecuniary statement analyst or reader can easily forecast abutting years forecasted sales will exceed $300,000, all other factors being equal (Wiley 14). Further, germane(predicate) and valid fiscal information (balance sheet, income statement, and statement of cash flows) must be relevant to the needs of the financial statement users. To relevant, the financial statements must comply with the predictive regard as tenets of the International fiscal Reporting Standards. Consequently, the financial statement users can increase the reliability of the decision organisers (Epstein 13). The International Financial Reporting Standards required that the financial statement should be prepared to enhance the decision making process (Jermkowcz 29). For example, International Financial Reporting Standards require the entities to report long call loans under the liabilities section of the financial reports. ... Compliance will make the forecasting activity more realistic (Porter799). In terms of forecasting value of the International Financial Reporting Standards, the financial reports should be prepared using the fair market value in enter sales or other related amounts. For example, the buyer agrees to the sellers ?2,000 selling price pegged for one factory production equipment. Consequently, the factory production equipment is recorded in the callers assets portion of the companys balance sheet at ?2,000. The amount represents the customers fair market value of the purchased equipment. Specifically, the fair value portion of the International Financial Reporting Standards can be found in IFRS no. 2, IFRS no. 3, IFRS no 7, International Accounting Standards Board (IASB) no 16, IAS no. 39, IAS no. 40, as well as IAS no 41 (Walton 13). During the preparation of financial statements, there are many situations when International Financial Reporting Standards insists on focusing on ensuring the predictive or forecasting goals. For example, the standards describe the companys financial assets as any resource that is controlled by the entity as a consequence of the entities forward transactions. Such asset items must have future economic benefits flowing into the business equation. Consequently, the standards require the companies to can or lower their asset values, depending on external factors (Shamrock 8). (b) Creative accounting (causes, techniques, & effects) Cosmetic acco unting causes turn on some impacts. The companys desire to seek the banks approval of their long term loan applications prods the company to increase its revenues. Normally, banks base their loan approvals on