Section I
- The sentence refers amedments in this update, which amendments are taking about.
- The sentence says about uncertain tax positions were not useful to users, the problem is what is the reason to disclose this.
- The problem is regarding pricing strategy
Section II
If the quoted pragaraph is wrong, then the auditor must fail to identify the contracts with a customer, fail to address the performance obiligations in the contract, determine the transaction price, unable to assign the transaction price, fail to recognize revenue while an organization satisfies a performance obiligation.
- Two main imposing sources of generally accepted accounting principles (GAAP) are as follows:
GASB – Governmental Accounting Standards Board.
AICPA – American Institute of Certified Public Accountants.
- Grandfathering is a provison which an old rule continues to apply the existing situation and the new rule will apply to the future cases. It is a leagal provisons where it implies the LTCG till 31st January will not be exaggerated only the gains portion after the date would be taxed. Let it clarify with an suitable example as follows
Suppose, I have invested Rs. 4 lakhs in stocks or equity funds in march 2018. On the 31st jan 2020 the value would be 6 lakhs, I dispose the investment for rs. 7.4 lakhs after 31st march 2020, then the LTCG will be calculated on the basis of 31st jan 2020 price so the gains is 1.4 lakh, and on this 1 lakh is tax free so the rest 20000 would be taxed at 10%, it has been grandfathered (PATIL 2017).
- There is a significance that the codification content with in a box justifies because it recognize when to consult the system, log into the system, find relevant accounting guidance by systematically browsing the codification content, log out of the system.
If it is unbox then it could lead a problematic to address the specific system, which may occure the failure of consultant.
- Role of Financial Accounting Foundation, FAF
The role of FAF are as follows
The FASB and The GASB are charged the highest quality standards in a manner of robust, comprehensive and inclusive.
The FAF management is resposnsible for providing stratregic concel and services
The FAF trustee is responsible to provide the oversight and promoting an independent and effective standard.
- There are ten steps involved into the Accounting Reseearch process these are:
- Establish the facts, identify and issues
- List of keyword and concepts
- Accounting information center to identify the research tresources
- The overview of the topic
- Identify the authoritative pronouncements
- Search for the articles
- Web searching
- Evaluating the financial statements
- Investmenst research reports
- Sum up of all
Section III
Adopting the updated Accounting standard (Grenier, Pomeroy and Stern 2015), the key financial ratios and the other levearage ratio (Grill, Lang and Smith 2015) supposed to get adversly affected. On the other hand it affects the borrowing capacity and debt contracts of the companies. Let it understand by some illustrations are as follows:
Increase of then debt equity ratio (Nurfadillah 2016) implies increase the operating liability, increase the current liability refers decrease the current ratio, quick is also get affected if the current liability increased.
Reference
Grenier, J.H., Pomeroy, B. and Stern, M.T., 2015. The effects of accounting standard precision, auditor task expertise, and judgment frameworks on audit firm litigation exposure. Contemporary Accounting Research, 32(1), pp.336-357.
Grill, M., Lang, J.H. and Smith, J., 2015. The impact of the Basel III leverage ratio on risk-taking and bank stability. Financial Stability Review, 2.
Nurfadillah, M., 2016. ANALISIS PENGARUH EARNING PER SHARE, DEBT TO EQUITY RATIO DAN RETURN ON EQUITY TERHADAP HARGA SAHAM PT UNILEVER INDONESIA Tbk. Jurnal Manajemen dan Akuntansi, 12(1).
PATIL, N., 2017. IMPACT OF TAX ON LONG TERM CAPITAL GAINS (LTCG) IN INDIAN STOCK MARKET. International Journal of Transformation in Accounting, Auditing & Taxation [ISSN: 2581-7590 (online)], 1(1).
