ipl-logo

3.8 Explain The Impairment Of Assets

1056 Words5 Pages

3.8 Explain the impairment of assets.
As per IAS 36 Impairment of Assets, if the carrying amount of an asset is more than the recoverable amount of the asset, the asset is seen as impaired. The assets will then need to be reduced to the recoverable amount and the difference will be recognised as an impairment loss. Entities are required to conduct annual impairments tests, with the exception of goodwill and certain intangible assets.
A company will look at various indicators to determine if there is a possible impairment.
External factors would be a decline in market value, changes in technological, market, economic and legal environment.
Internal factors would be obsolescence or physical damage, restructuring of the company etc…

3.9 Evaluate …show more content…

4.2 Evaluate and understand the concept of consolidated financial statements
4.3 Prepare consolidated financial statements including an associate.

4.1 Evaluate and understand the concepts and principles of a financial group.
Many large businesses consist of several companies controlled by one central or administrative company. Together these companies are called a group. The controlling company, called the parent or holding company, will own some or all of the shares in the other companies, called subsidiaries.

There are many reasons for businesses to operate as groups; for the goodwill associated with the names of the subsidiaries, for tax or legal purposes and so forth. In many countries, company law requires that the results of a group should be presented as a whole. Unfortunately, it is not possible simply to add all the results together and this chapter and those following will teach you how to consolidate all the results of companies within a group.
In traditional accounting terminology, a group of companies consists of a parent company and one or more subsidiary companies which are controlled by the parent company.

Some Important terminology to

Show More
Related

  • Why Did The Number Of Corporations Increase In The Late 1800s

    696 Words  | 3 Pages

    Define corporation. Pg. 422 Corporation is an organization that is authorized by law to carry on an activity on an activity but treated as though it were a single person. Define economies of scale.

    Read More

  • Hcs/531 Week 4 Health Care Paper

    1417 Words  | 6 Pages

    When being placed in the role of a manager, it is important to understand the finances of the organization and how to read and understand the recording of finances. It is also important to understand how all the different parts of the records fit together to give us the knowledge of where the business is financially. Knowing also the different responsibility centers related to financial recording and how they function is important as a manager. Once a manager understands what and where items belong on a balance sheet, they will better understand the state that the business is in. “It provides you with a picture of the financial health of your practice or organization on a certain date.”

    Read More

  • Contraceptive Mandate Case

    628 Words  | 3 Pages

    The film “The Corporation” is about corporate America and how it shaped our world today. A corporation is a company or group of people authorized as a single entity and recognized in law. The idea of corporations started hundreds of years ago. Corporations are now much different in today’s world than they were when they started. Corporations are now identified by the law as a person.

    Read More

  • Toy Story Analysis

    1683 Words  | 7 Pages

    Toy story is the initially enlivened film by Pixar Directed by John Lasseter. Toy Story takes after a gathering of toys who put on a show to be dead at whatever point people are available. These toys are possessed by a kid named Andy. On His birthday he gets Buzz Light year who trusts himself as a genuine astronaut. Andy feels to supplant with his most loved toy Woody.

    Read More

  • Wgu Audit Task

    529 Words  | 3 Pages

    I need go through last year audit file and report to gain understanding of the entity, its nature, the principal activities carried on, accounting policies, and critical audit area And test checked trial balance, balance sheet and profit or loss statement to general ledger to ensure they are agree to each other because there is possible clients make changes in general ledger after financial statement has been prepared. I also need checked the opening balance of balance sheet items with last year audit report to ensure the amounts are agreed with last audited figure. Before do the audit, I need fill in audit control sheet then do audit planning and planning materiality

    Read More

  • Acc 201 Final Project Part 1 Accounting Cycle

    1187 Words  | 5 Pages

    ACC 201 Final Project Part I Accounting Cycle Report Vanessa Ann Williams Southern New Hampshire University The accountant cycle has really impacted me to gain insight on the financial side of Peyton Company. In the accountant cycle, there are many particular directions involve determining the growth of the company such as steps, role, omission and financial statements. It’s important to apply every step from the accountant cycle to make a financial critical decision in the long run. This report will have a breakdown of how to apply the accountant cycle for Peyton Company to be aware of future financial decisions to keep the company holding strong.

    Read More

  • The Importance Of Accounting Memo

    1616 Words  | 7 Pages

    Analysis • This section is regarded as the most critical step in writing an effective accounting memo by bringing together the required facts of the research, any supporting authoritative literature, and an accountants overall evaluation before forming a conclusion. • Analysis includes information from relevant guidance, along with an accountant’s own words about how the guidance is applicable. • The memo should contain enough authoritative guidance that the user will not need to perform additional research in the Codification. • Make sure to utilize the concept known as the “guidance sandwich.”

    Read More

  • Apple Market Structure

    1323 Words  | 6 Pages

    is known as Corporation. Apple Inc. is one of the leading organizations in technology all over the world, the company had to convert its form of business organization to the corporate form so as to enable them raise the capital needed for expansion and development of new products. A corporation is legal and separate from the owner; they operate on set bylaws and procedures which regulates their operations and decision making process. These bylaws guide the stakeholders in electing the board of directors who then pick the managers. The managers are expected to run the organization with the interests of the stakeholders at heart.

    Read More

  • Tesco External Factors

    3270 Words  | 14 Pages

    IMPORTANCE OF EXTERNAL FACTORS AFFECTING BUSINESS Business of the organization is affected by many factors. There are some internal and external factors influencing the business. There are many internal and external factors affecting the business environment. Internal factors are related to the SWOT analysis whereas the PESTLE analysis is used to measure the external factors affecting the business. These factors includes • Political • Economical • Sociological • Technological • Legal • Environmental Political JLR has a choice to start a setup in the china; the political situation of china is quite stable, which is a good sign for a business.

    Read More

  • Coca-Cola Political Factors

    814 Words  | 4 Pages

    Political Analysis and Factors The Food and Drug Administration (FDA) regards non-alcoholic beverages such as Coca Cola as within the food category. The government regulates the manufacturing procedure of these products. Companies that fail to meet the government 's standards are subject to fines. Coca Cola is also subject to the Occupational Safety and Health Act and to local, state, federal, and foreign environmental regulation.

    Read More

  • Tesco Accounting Report

    1656 Words  | 7 Pages

    Also many companies reporting related to the state of the value added or environmental information, these are concentrated in industrial sectors. The financial statements reflect the financial position of company, financial performance and cash flows of the company, it is significant to note that the correct depiction of the impacts of transactions and other events and circumstances according to the explanations and criteria identification of assets, liabilities, income and expenses go in the same outline (Brealey,

    Read More

  • The Importance Of Accounting In Personal Finance

    748 Words  | 3 Pages

    According to Averkamp (2016), “accounting is the recording of financial transactions plus storing, sorting, retrieving, summarizing, and presenting information in various reports and analyses”. Therefore knowing how to carry out these tasks

    Read More

  • Aaron Salomon Case Study

    1852 Words  | 8 Pages

    Unless a subsidiary is found to be independent of the parent company, it would be classified as one and the same with the parent company under the rules of contractual agency for the purposes of determining liability or impropriety. In Littlewoods Mail Order Stores Ltd v. IRC (1969), Lord Denning pointed out a new emphasis on parent and subsidiary companies: I think that we should look at the Fork Manufacturing Co. Ltd. and see it as it really is the wholly owned subsidiary of Littlewoods. It is the creature, the puppet, of Littlewoods, in point of fact: and it should be so regarded in point of law. Lord Denning’s emphasis that ‘law’ and ‘facts’ should operate together is reminiscent of the Court of Appeal’s approach in Salomon.

    Read More

  • Marketing Strategy Of Chanel

    1438 Words  | 6 Pages

    These may be internal as well as external, the external ones particularly hard to gauge and hence their impact on the product or the organization comparatively uncertain to

    Read More

  • Role Of Corporate Governance In Nestle

    1346 Words  | 6 Pages

    A system to check and balances the benefit of all the board of directors and to avoid some of top management from making decisions that only benefit themselves is created and named corporate governance. Corporate governance means the system of rules, practices and processes by which a company is directed and controlled. The set of rules provided as a guidelines for the board of directors to make sure that accountability and fairness in a company’s relationship with its stakeholders such as financiers, customers, management, employees, shareholders and also society in order to achieve company’s goals and targets in a manner that add a value to the company. All of the stakeholders play an important role in corporate governance to ensure that

    Read More

More about 3.8 Explain The Impairment Of Assets

Open Document