Financial accounting Math Problem Example | Topics and Well Written Essays - 500 words

Financial accounting - Math Problem ExampleYou should not put forward impairment losses in the financial statement as these allow for decrease our reported profit and may be misleading for tax governing and shareholder. We have a responsibility of disclosing fair and accurate information, therefore we should not provide for impairment losses until we want to close our operations.Our business investment buildings ordain be included at their fair value agree to the judgment of auditors in the balance under long-term leases head. This will be done according to IAS 16 principles which calls for fair-value to be include in the balance sheet. Fair value consists of costs less depreciation less impairment losses. Since, we are not charging both depreciation, we can simply state these building at their NRV that according to you come around $2.5 Million.You have also asked me just about how to treat grants. You are right about the fact that we can treat it as deferred income. IAS 20 al lows us to treat it as deferred income. However, this option may increase will increase our profit and will also result in more tax payments. So, it is better to not treat it as tax income and instead amortize it completely by adjusting it with the obtain of fixed assets.