We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Intermediate Accounting Essay Sample

essay
The whole doc is available only for registered users OPEN DOC
  • Pages:
  • Word count: 355
  • Category: value

A limited time offer!

Get a custom sample essay written according to your requirements urgent 3h delivery guaranteed

Order Now

Intermediate Accounting Essay Sample

1. As of December 31, 2011, what amount, if any , of sales taxes due should be recognized in eVade’s financial statements?

Assuming the financial statements for year ending 12/31/2011 have not been issued, an adjustment to sales tax liability can be recognized for the entire $25,000.000. As well, affected prior period statements will need to be re-stated. This is consistent with FASB codification ASC250-10-45-23

2. What effect, if any, does eVade’s decision to participate in the tax amnesty program have on the amount recognized as of March 31, 2012?

According to ASC250-10-50-9 the participation in the tax amnesty program will cause a liability to be recorded in the current year statements and adjustments for prior periods. If comparative financial statements are issued, the prior year column will need to reflect the adjustment and a change in opening balance (retained earnings) for the current year.

3. What amounts should be recognized in the financial statements for the $25 million payment on June 15, 2012?

The 2012 balance sheet will reflect a decrease (dr) in the Sales/Use Tax Payable account and a decrease (cr) in the Cash account. This is reflected in ASC250-10-50-8.

4. Would your answers to the the question 1, 2, and 3 change under IFRS? Explain your answer supported by the reference from IFRSs.

Differences between U.S. GAAP and IFRS with regard to errors are that GAAP indicates a generally stricter interpretation of how the error should be handled.

Regarding question #1, GAAP states that all prior periods affected should be re- stated and balances rolled forward accordingly. IFRS allows in statement IAS 8, para 49 for the subjective evaluation of practicality with regard to how far back the re-statement should go. Question # 2, GAAP states that the liability is recorded in the current year and IFRS states in IAS 8, para 46 that a correction for prior period error is excluded from profit or loss for the period in which the error is discovered

Question #3, GAAP vs IFRS – No difference in treatment according to IAS 8, para 41.

We can write a custom essay

According to Your Specific Requirements

Order an essay
Get Access To The Full Essay
icon
300+
Materials Daily
icon
100,000+ Subjects
2000+ Topics
icon
Free Plagiarism
Checker
icon
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access
immediately?

Become a member

Your Answer Is Very Helpful For Us
Thank You A Lot!

logo

Emma Taylor

online

Hi there!
Would you like to get such a paper?
How about getting a customized one?

Can't find What you were Looking for?

Get access to our huge, continuously updated knowledge base

The next update will be in:
14 : 59 : 59
Become a Member