Role of Accounting Policy in Fair Statement’s Representation

2021 ◽  
pp. 101-110
Author(s):  
Elena Dombrovskaya
Keyword(s):  
Accounting Policy

Prestige Projects Limited: Challenges in Transitioning to New Accounting Policy

2021 ◽  
Author(s):  
Samir Kumar Barua ◽  
Mahendra R. Gujarathi
Keyword(s):  
Financial Reporting ◽  
Professional Judgment ◽  
Accounting Standard ◽  
Construction Contracts ◽  
Policy Choices ◽  
Accounting Courses ◽  
Business Functions ◽  
Accounting Policy

This case provides an experiential learning opportunity to (a) appreciate the role of professional judgment in accounting policy choices, (b) evaluate the effect of accounting decisions on other business functions, and (c) understand the challenges in transitioning to a new accounting standard. Prestige’s previous auditors were fine with its use of output-based measure (milestones completed) to compute the percentage-of-completion (POC) for its long-term construction contracts. However, the newly appointed auditors recommended Prestige to switch over to input-based measure (costs incurred) to compute POC. Students need to choose the appropriate financial reporting policy considering accounting and non-accounting issues. The case addresses an important context, long-term construction contracts. Although the case setting is in India, it can be used in any country given its GAAP-agnostic nature. The case is best suited for intermediate accounting courses in which the topic of revenue recognition is addressed.

scholarly journals Does Transfer Pricing Moderate the Effect of Deferred Tax Assets and Deferred Tax Expenses on Accrual Earnings Management of Firms in Indonesia?

2021 ◽  
Vol 6 (3) ◽  
pp. 97-103
Author(s):  
Nera Marinda Machdar ◽  
Dade Nurdiniah
Keyword(s):  
Earnings Management ◽  
Transfer Pricing ◽  
Manufacturing Companies ◽  
Moderator Variable ◽  
Policy Makers ◽  
Deferred Tax Assets ◽  
Management Actions ◽  
Deferred Tax ◽  
Accounting Policy

The purpose of this study is to analyze (a) the effect of deferred tax assets on accrual earnings management; (b) the effect of deferred tax expenses on accrual earnings management; (c) the role of transfer pricing as a moderator variable to strengthen the effect of deferred tax assets on accrual earnings management; and (d) the role of transfer pricing as a moderator variable to strengthen the effect of deferred tax expenses on accrual earnings management. The samples consist of 160 manufacturing companies listed in Indonesia Stock Exchange (IDX). The study utilizes the financial statements from 2012 to 2018. This study presents that (a) deferred tax assets influence accrual earnings management; b) deferred tax expenses affect accrual earnings management; c) transfer pricing does not strengthen the effect of deferred tax assets on accrual earnings management; and d) transfer pricing does not strengthen the effect of deferred tax expenses on accrual earnings management. This study contributes to accounting studies, tax authorities and regulators, and accounting policy makers. Firstly, this research contributes to the development of accounting studies on the role of transfer pricing as a moderator of the effect of deferred tax assets and deferred tax liabilities on earnings management. Secondly, the results of this study can make a consideration for tax authorities and regulators in addressing company management actions to minimize the amount of tax paid by utilizing policies according to PSAK. It is worth considering how to sanction companies that deliberately reduce the amount of tax that should be paid. It is necessary to conduct tax investigation by the Directorate General of taxes on companies that are indicated to have practiced accrual earnings management with the aim of reducing the tax burden. Thirdly, accounting policy makers need to consider how management reduces the tax that should be paid through accounting policies that are allowed under PSAK and transfer pricing mechanism.

scholarly journals EMPIRICAL EVIDENCE OF THE ROLE OF ACCOUNTING POLICY ON BOND RATING TO FINANCIAL COMPANIES LISTED IN INDONESIA STOCK EXCHANGE

2018 ◽  
Vol 18 (1) ◽  
pp. 35
Author(s):  
Steacy Chaterine Tan
Keyword(s):  
Empirical Study ◽  
Empirical Evidence ◽  
Stock Exchange ◽  
Bond Rating ◽  
Accounting Policy

<p>The objective of the empirical study is to examine the effect of leverage, liquidity, profitability and accounting policies on bond rating. The sample of this empirical study is financial companies that listed in Indonesia Stock Exchange during 2012-2016. The results of this empirical study shows that leverage affects negatively on bonds rating. While, liquidity, profitability, and accounting policy affect positively on bonds rating.</p><p> </p>

Sun Airlines, Inc.: Financial Reporting of Point and Loyalty Programs

2003 ◽  
Vol 18 (4) ◽  
pp. 359-368
Author(s):  
Mahendra R. Gujarathi ◽  
Ralph J. McQuade
Keyword(s):  
Financial Reporting ◽  
Business Strategy ◽  
Loyalty Programs ◽  
Technical Literature ◽  
Generally Accepted Accounting Principles ◽  
Entry Level ◽  
Market Participants ◽  
Economic Reality ◽  
Accounting Policy

This case presents a multifaceted, decision-oriented context to assess the appropriateness of accounting policy for ensuring a faithful representation of underlying economic reality. It will enhance your: (1) appreciation for the role of judgment in accounting decision making, (2) identification of the appropriate sources of generally accepted accounting principles (GAAP) and their authoritative status, (3) understanding and application of the technical literature, and (4) evaluation of accounting policy in the context of an entity's business strategy and potential reactions of capital market participants. The case serves as a basis for developing the functional, personal, and broad business perspective competencies identified as desirable by the AICPA (1999) for entry-level professionals.

scholarly journals Prospects for the Development of Transport Services in Uzbekistan and the Theoretical Basis for Accounting for Income and Expenses in Enterprises

2019 ◽  
Vol 5 (12) ◽  
pp. 329-335
Author(s):  
I. Bakieva ◽  
F. Temirov
Keyword(s):  
Transport System ◽  
Theoretical Basis ◽  
Road Transport ◽  
Transport Services ◽  
The Republic ◽  
Accounting Policy

The article considers the prospects for the development of transport services in the Republic of Uzbekistan and the theoretical basis for accounting for income and expenses at enterprises. As well as the transport system and the prospects for its development, the role of road transport in the transport system of the republic, the objective need to account for income and expenses at enterprises, the reflection of income and expenses in the accounting policy of the enterprise.

scholarly journals Strategic Correction of Enterprise Reporting Policy

2021 ◽  
pp. 5-11
Author(s):  
Viktoriia Gryn ◽  
Keyword(s):  
Accounting Information ◽  
Complete Information ◽  
Accounting System ◽  
Regulatory Requirements ◽  
Informational Influence ◽  
Strategic Goals ◽  
Transfer Of Information ◽  
Theoretical Foundations ◽  
Accounting Policy

One of the ways to implement the strategic accounting policy is the strategic correction of the reporting policy of the enterprise, which provides for the creation of the necessary information impact on external users who are subjects of management decisions. The purpose of the article is to analyze the theoretical foundations and substantiate the mechanisms for implementing the strategic correction of the enterprise reporting policy. The concept of strategic correction of the enterprise reporting policy has been disclosed. The role of signal accounting theory in the formation of the theoretical foundations of strategic accounting policy of the enterprise has been analyzed. The role of strategic additional disclosure in achieving the strategic goals of the enterprise has been determined. The reasons for understanding the information about the accounting policy as a source of accounting signals for external users have been identified. The concept of additional disclosure of accounting information of the enterprise as the transfer of information through additional forms of reporting, which goes beyond the current regulatory requirements or accounting standards set by the regulators of the national accounting system has been grounded. The necessity of forming a strategic reporting policy based on the strategic goals has been determined. The implementation of informational influence on various groups of external entities, the decisions of which depend on the achievement of strategic goals of the enterprise has been determined as the main purpose of the strategic correction of the reporting policy of the enterprise. The dependence of the achievement of the strategic goals of the enterprise on the disclosure of promising accounting information and on additional detailed or more complete information about its current and past activities has been grounded.

scholarly journals Explaining Accounting Policy Practices Under IFRS: The Role of Institutional Factors

2016 ◽  
Author(s):  
Elena de las Heras ◽  
Joss Anttnio Cardoso Moreira ◽  
Patrrcia Andrea Bastos Teixeira Lopes Couto Viana
Keyword(s):  
Institutional Factors ◽  
Accounting Policy
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