Impairment Loss Joint Ventures

Question: Discuss about the Impairment Loss for Joint Ventures. Answer: Introduction: Before understanding the concept of impairment loss it is very important to know the meaning of the word impairment. It is basically a drop in the value of an asset as reflected in the balance sheet. The said word connotes to those set of assets which has a long market but the value of such an asset in the market has devalued significantly. Thus in simple terms the difference between assetss carrying amount or a cash generating unit and the actual recoverable amount is termed as impairment loss. Impairment happens only of assets and the accounting standard that spells out the same is IAS 36 Impairment of Assets. For the same it is very important to understand how carrying amount is calculated (investopedia.com, 2016). The amount of an asset which is recorded in the balance sheet of a company after reducing the same with the depreciation and the impairment loss accumulated is termed as carrying amount. The broad category of asses which fall under this purview are assets such as goodw ill, plant and machinery, investments in subsidiaries, joint ventures, buildings and other intangible assets. The main aim of the said accounting standard is to ensure that the true recoverable amount of the assets of a company are known to the investors and the shareholders of the company which would further enable to determine the true worth of the company. As per the accounting standard it is mandatory that the provision for the same is duly made under the head impairment loss (iasplus.com, 2014). The amount is treated as an expense in the income statement of the company and is reduced from the value of the respective asset while disclosing the same in the balance sheet. The said standard applies to all the assets except the following mentioned below simply because there are separate standards which deals with these assets. They are: Inventories IAS 2 Construction contract assets IAS 11 Deferred tax asset- IAS 12 Employee benefits- IAS 19 Financial assets such as financial lease- IAS 39 Investment properties that are carried at fair value- IAS 40 Agricultural assets carried at fair value- IAS 41 Insurance contract- IFRS 4 Non-current assets which are held for sale- IFRS 5 Upon completion of every Financial Year or triggering of any predefined date / period, it is mandatory for every entity to carry out a test of impairment in spite of no apparent sign of the same. There are various indications (external and internal) of impairment which enable an enterprise to decide whether to impair the asset or not. Factors such as a demur of the market value, technological, economical or changes in the legal system which has a negative impact, increase in the market interest rates or an imbalance between the net assets of the company and the market capitalization wherein the inclination is towards a higher net asset value of the company are all factors external in nature. Further internal factors such as obsolescence of the asset, assets held for sale, the performance of the company is worse or in case of mergers and acquisitions if the carrying amount of the assets is greater than the carrying amount of the investees assets are also contributory to the impairment of assets. If there seems to be indication of impairment then it is very crucial to revisit the life of the asset, method of depreciation to be used and residual value (accaglobal.com, 2014). For example where an asset is held for sale then the carrying amount of the said asset should be revised to the amount that would be recovered on sale of the said asset rather that the future cash flows that the said asset would generate. However the said standard not only tells about the accounting for the diminution in the value of the assets but also deals with situations wherein the impairment loss may be reversed as well. The said amount should be reversed only to the extent of the depreciated historical cost of the asset that would have been had the said asset not been impaired. Apart from the reversal with regards the revalued asset, the impairment loss that is being reversed is recognized in the profit and loss account. After the same is done the depreciation for the future period should also be accounted for. One exception to the reversal of impairment loss is that the same is not applicable in case of goodwill. IAS 36- Impairment of assets, states certain disclosure requirements. They are as under: Disclousure By Class of Assets (IAS 36.126) As per the said disclosure requirement it asks for disclosing the impairment loss which is being recognized and the loss which is being reversed in the profit and loss account. The line item(s) of the statement of comprehensive income, the losses due to impairment recognized and reversed on the revalued assets in other comprehensive income are also to be disclosed under the said sub-heading. Disclousure ByReportabe Segment(IAS 36.129) The reportable segments of the company under segmental reporting also has various assets, therefore the disclosure of the recognized and the reversed impairment losses if the assets of the segments are to be disclosed. Other Disclosures If the loss of impairment or reversal is of substance then the same should be disclosed as per IAS 36.130. The disclosure would be the circumstances due to which such a reversal or recognition is being done, the amount, the asset to which is being impaired or reversed, the cash generating unit and the allocation of the individual amount to the class of assets. Further to this if the recoverable amount is determined as the balance of the fair value and the cost of selling the asset then IFRS 13 should be applied for determination of the fair value of the asset (pwc.com, 2014). As per the Australian Accounting Standard Board, impairment of assets is described under standard AASB 136 which is similar to the International Accounting Standards. Fort he Australian Companies or the companies registered in Australia, the same is applicable on or after January 1st, 2005. There are times when it is not possible to determine the impairment amount of assets of a company individually. In such a situation a concept of cash generating unit (CGU) arises wherein the recoverable amount of the CGU to which the impaired asset belongs is determined. If the situation is so then the amount of impairment is first and foremost allocated to the goodwill and then the remaining impairment amount is allocated to the assets in the CGU on a prorate basis (Australian Accounting Standards Board, 2009). Therefore the disclosure requirements of IAS 36- Impairment of Assets are comprehensive and exhaustive so as to determine each and every detail about the asset being impaired along with the reasons for the same and the amount of impairment. These data is of utmost importance and hence are made compulsory by the accounting standards acclaimed internationally. Further the Australian Standard for the same is also very similar to IAS 36. The assets being impaired are land, shoe factory, machinery for manufacturing shoes and Goodwill on acquisition of competing companies. The brand Crossbow Shoes will not be impaired as the impairment of assets are being done due to online buying strategy which clearly shows that the brand value of the company is nowhere hampered and due to the same it is being able to enter the online selling market easily. Further inventory is not subject to impairment as the valuation of the same is covered under IAS 2. Since the recoverable amount of land is known separately hence separate accounting for impairment is required to be done for the same. The total financial position of the company as on 30 June 2015 was $1680000. However the recoverable amount is estimated at $1420000. Thus the total impairment is of $1680000 - $1420000 = $260000. Out of the same the recoverable amount of land is separately known as $171000, therefore the amount of impairment loss for the land is $200000 - $171000 = $29000. As per IAS 36, since the recoverable amount of the other individual assets is not known hence first and foremost the goodwill will be reduced. After the same the rest of the assets will be reduced on a prorate basis (ey.com, 2014). Thus the remaining amount of impairment after allocation of $29000 to land is $231000, of which $40000 is allocated to goodwill and $191000 is allocated to the factory and the machinery in the ratio of 7:4. Thus the impairment loss for factory is 7/11*191000 = $121545 and for machinery is 4/11*191000= $69455. The Journal Entries for the impairment loss occurring as on 30 June 2015 are as under: For impairment of land: Profit and Loss Account (loss on impairment) Dr...............$29000 To accumulated impairment loss (Land)...............................................$29000 For impairment of other assets: Profit and Loss Account (loss on impairment) Dr.................$231000 To goodwill A/c.....................................................................................$40000 To accumulated impairment loss (Shoe Factory)A/c...........................$121545 To accumulated impairment loss (machinery) A/c................................$69455 References: accaglobal.com, (2014), IAS 36 Impairment of Assets, Available at https://www.accaglobal.com/in/en/discover/cpd-articles/corporate-reporting/ias36-impairment.html (Accessed 14th September 2016) Australian Accounting Standards Board, (2009), Impairment of Assets- AASB 136, Available at https://www.aasb.gov.au/admin/file/content105/c9/AASB136_07-04_COMPjun09_01-10.pdf (Accessed 15th September 2016) Dagwell, R., Wines, G., Lambert, C., (2012), Corporate Accounting in Australia, Pearson: Australia ey.com, (2014), Impairment Accounting the basics of IAS 36 , Impairment of Assets, Available at https://www.ey.com/Publication/vwLUAssets/Impairment_accounting_the_basics_of_IAS_36_Impairment_of_Assets/$FILE/Impairment_accounting_IAS_36.pdf (Accessed 14th September 2016) iasplus.com, (2014), IAS 36 Impairment of Assets, Available at https://www.iasplus.com/en/standards/ias/ias36 (Accessed 14th September 2016) investopedia.com, (2016), Impairment, Available at https://www.investopedia.com/terms/i/impairment.asp (Accessed 15th September 2016) pwc.com, (2014), Making Sense of a complex world- IAS 36 Impairment of Assets, Available at https://www.pwc.com/gx/en/communications/pdf/ias36_impairment_of_assets_final.pdf (Accessed 14th September 2016)

Transport and Maritime Traffic free essay sample

Cost is an important factor which trading industries will have to consider. In Europe and North America the proportion of development of road and rail is the highest at 25 to 35 per cent. Thus, trade is predominantly transacted by road and rail. Cargo between countries without a common border is carried mainly by sea because of the growth rates for air freight are more than double those for shipping in recent years. In comparison to transporting via ocean freight and air freight, maritime traffic is considerably much cheaper. Airlines bills a chargeable weight. Chargeable weight is calculated from a combination of the weight and size of a shipment. We will write a custom essay sample on Transport and Maritime Traffic or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Whereas, sea carriers charge per container rates for shipping in standard containers. For example; while a standard shipment shipped from Singapore to Europe costs Sgd5000, the same shipment might cost up to Sgd35,000 via air freight. While weight can factor into the price from sea carriers, their charge tends to be based more on the size of a shipment. Thus, with larger and heavier shipments, it is much cheaper to ship by sea. Thus, the main advantage of marine transportation is its economies of scale making it the cheapest per unit of all transport modes which is one of the important factors as to why maritime traffic is growing. According to data statistics UK, US, EU, NZ and many other countries marine government data statistics show that maritime traffic holds the highest transportation statistics in the country. Growth in World Trade via globalization As mentioned in the introductory paragraph, the main reason behind the growth in maritime traffic is the growth in globalization. In the past, the WTO provided a new cycle to world trade whereby China’s economic opening led to their admission to the WTO in 2001 causing its exports to increase 4times within 5 years. Another example of integrated markets boosting international trade are exports from Mexico to the USA within 6 years of NAFTA being established. This measure taken by WTO helped newly-industrializing emerging economies, particularly China and India, for energy and mineral resources. These resources had to be transported regionally via marine traffic. This led to increasing quantities of goods being transported from far-distant countries via ships. (http://worldoceanreview. com/en/wor-1/transport/global-shipping/3/WTO). The growth in globalization causes the growth in maritime traffic as well. This had and is still causing a steady growth in maritime traffic as well. This is evident via the statistics review by the United Nations marine trade which shows that Around 80 per cent of the volume of international trade in goods is carried by sea, and the percentage is even higher for most developing countries. Thus, globalization has played a huge role as to why maritime traffic has and is growing. †¢Effective mode of transportation Physical properties of the various modes of transportation available also play a key role as to why maritime traffic is growing. Due to the physical properties of water conferring buoyancy and limited friction, maritime transportation is the most effective mode of transportation to move large quantities of cargo. The approximate maximum takeoff weight for air cargo planes is~910,000. worlds longest, heaviest trains. Demonstration union train-WTO†). Road transportation have both weight and distance constraints which will be the least option to consider for bulk and far distance transportation. Whereas, bulk carriers ships are designed to carry specific commodities. They include the largest tankers, the Ultra Large Crude Carriers which are up to ~500,000 dwt. (Aragon, James R. ; Messer, Tuuli Anna (2001). Masters handbook on ships business. Cambridge, Md: Cornell Maritime Press). In July 2009,the global merchant fleet consisted of a total of 53,005 vessels. In all, the global merchant fleet has a capacity of ~1192 million dwt. (http://worldoceanreview. com/en/wor-1/transport/global-shipping/3/). Thus, it is evident that maritime transportation is the only feasible mode of transportation for bulk shipping such as coal, minerals, oil tankers and other bulky goods for companies which needs to ship a large amount of goods at once, with longer lead times. This is one of the reasons as to why there is a growth in maritime traffic. (III)Conclusion Despite the fact that maritime transportation has high terminal costs since port infrastructures are among the most expensive to build, maintain and improve; maritime traffic is growing. As mentioned above, due to reasons such as cost efficiency, global trading and most effective transportation of heavy and bulky goods with long lead times; as long as there is world trade there will definitely be a demand and growth in maritime traffic.

IELTS Essay Structure Sample

IELTS Essay Structure SampleAn IELTS essay structure sample is an easy way to learn English writing. It provides the student with the basic rules and techniques needed to learn good English writing. This lesson comes in a portable, easy-to-use format that enables the learner to study it at his own pace. It also provides a specific list of key terms that will be used in the assignment.With a powerful vocabulary and a good understanding of how the English language is used, the student will have no trouble answering the questions asked in the test. As the student continues to read the essay, he or she will see that the entire essay has been constructed well using relevant and correct English grammar. The goal is for the student to get a sense of how each section is written. After the IELTS essay structure sample is studied and practiced, it can be used as a guide on how to compose the essay itself. This is a great tool for the student to use during the study phase of the exam.The IELTS is one of the toughest and most difficult exams in the world. Students who excel in English writing will do well in this test. The study guide helps them achieve a success grade in the exam.The essay structure sample consists of three sections that are linked together with the research topic. The first section will discuss the importance of the topic and the second one will focus on the idea and explain its definition. The third section will show how the writer builds upon the topic by providing sources and supporting documents.The essay structure sample is formatted to be easily read and understood. Students can learn a lot from the structure of the IELTS essay. This structure can help them build their confidence in the field of writing. They will be able to formulate a sound argument based on factual information and relevant background.The research section of the IELTS essay structure sample includes the type of research that will be done and the sources that will be used. The ind ividual reading the essay will be able to decide if the information provided is useful to the student. Students can now know that they are to provide good and relevant information in order to be successful in the career they wish to pursue.The writing section of the IELTS essay structure sample provides the student with the skills necessary to effectively produce a report. The student must be able to use his or her strong knowledge of grammar and basic English vocabulary to present the information in a clear and concise manner. All sections should be evaluated independently and it is up to the student to determine how good he or she has been.If a student does not reach good results in the essay, he or she can come back to the section and review all the information again. The essay structure sample is a valuable tool for the student who wants to write a good English paper. The study guide can help the student to realize that he or she needs to learn the specific rules of the English language in order to be successful in the course.

Thursday Caption Contest - February 18th

He was United States from Delaware, and is now the Vice-President of the United States. Did you know that Joe Biden is also dedicated family man? If you can caption this image of Vice President Joe Biden at Georgetown University for a campus tour, you could win. We’ll pick our three favorites, taking into account the number of likes your submission gets (hint: it helps to share)!Winner gets a $20 Amazon Gift Card, $20 in site credits, plus bragging rights. The two runners-up each get $10 in credits to apply towardsunlocking successfulapplication examplesand/or chatting withmentors. Follow us onFacebookandTwitterto see the winners every week! Contest ends Thursday, February 25th. Three submissions max. Congrats tolast week’s winners!

Changing World Lasting Values Essay Essay Example

Changing World Lasting Values Essay Essay Example Changing World Lasting Values Essay Essay Changing World Lasting Values Essay Essay You hear many narratives presents - that the universe is absurd. that everything has changed. that old moral values have died. This is all non-sense. for if you look for world beneath the jumble of words which hide it. you will rediscover the ageless adult male. True values were non invented for the pleasance of doddering moralists. They exist because without them. neither society nor felicity could last. Here. so. are a few regulations every bit old as civilisation itself which remain true despite the progresss of scientific discipline and engineering. The first is that adult male must populate for something other than himself. The adult male who meditates endlessly about himself finds a 1000 grounds to be unhappy. He has notaccomplished everything he wanted to or should hold done ; he has non gotten everything he thought he deserved ; he has non been loved as he dreamed of being loved- But if he lives for ideals outside of himself - for his religion or his state. for his friends. his married woman and household. he miraculously forgets all his junior-grade concerns. In seeking to do others happy. he besides makes himself happy. The regular interior universe is the regular outer universe. â€Å" The 2nd regulation is that adult male must move. â€Å"The joy of the psyche is inactivity. † Alternatively of keening the absurdness of the universe. allow us seek to transform our ain small corner. It is non impossible. We can non alter the whole existence. but who hopes to make that? Our aim is much more simple: to make our occupation and make it good. to go a maestro at it. Each one works in his ain field. I write books. the carpenter assembles my bookshelves. the policeman directs traffic. the applied scientist. concepts. the curate governs. All of them. maintain busy at work which they know how to make good. are happy. This is so true that when people have leisure clip. they keep busy with seemingly useless activities such as games and athleticss. As for utile action. we know from experience that it is effectual: an active city manager makes a metropolis comfortable ; an active priest brings verve to a parish. â€Å"Happy are those in whose eyes work forces look for order. † The 3rd regulation is that one must believe in the power of the will. It is non true that the hereafter is predetermined- A great adult male can alter the class of history. Any adult male who has the bravery and the will can alter his ain hereafter. Naturally. none of us is all- powerful. Each man’s freedom has its bounds. Freedom lies between the boundary line of the possible and the will. It is beyond my power to forestall war. but I can execute an act which. multiplied by 1000000s. will be effectual. It is non possible for me to win a conflict. but it is up to me to be a brave soldier. Since this restriction of the will is dependent on what one dares. one must non worry about his restriction ; but do the best he can. Finally. the 4th. and most cherished of all values. is faithfulness. Fidelity to promises. contracts. to others. and to oneself. One must be among those who can be counted upon. Faithfulness is non an easy virtuousness. Thousand of enticements are thrown across our waies. â€Å"Faithfulness in matrimony. † said Bernard Shaw. is no more natural to adult male than the coop to the tiger. † Undoubtedly. fidelity is â€Å"natural. † It is born of a voluntary determination. invariably renewed. which helps us to lift above our natures. But it gives us the enduring joy of being at peace with ourselves. I may predate an immediate pleasance to guarantee myself the great joy in the hereafter of looking at my yesteryear without shame. but with pride. Every society in which citizens live for naught but fugitive pleasances. where work forces no longer swear each other. and whose members let themselves travel is doomed. When Rome let travel and ceased to put shop by the values which made her great. she perished. When France clung to eternal values she was saved. Modern engineering may alter one’s manners of action. but they change neither its values. the grounds for it. nor the responsibility of fidelity. Thus it was in the beginning and so it will ever be.

International Econ Article Example | Topics and Well Written Essays - 250 words

International Econ - Article Example I’m not going to use more than what is required and avoid wasting water altogether. I believe that we in the developed world have a duty not to pollute the atmosphere as well and hence I’m going to ensure that my car is up to date with the latest emission standards. This, I think is the least we owe to the developing world i.e., cutting down our carbon footprint. Apart from this, I plan to visit some of the areas affected by water shortage and try to learn first hand what the problems are and what I can do as an individual. I can petition my congressman and senator about the legislation that would bring about changes in the way aid money from the US is spent. For this, I need to have a clear understanding on what the goals and objectives are about. In conclusion, I believe that each of us has a duty to ensure that we live in accordance with the environment and we should remember that we have merely borrowed the earth from the future generations and hence we have to ensure that they have a chance at the good

Evaluate three of the four books we've read this term, discussing Essay

Evaluate three of the four books we've read this term, discussing whether you think they were bad or not - Essay Example Obviously, bad books are those that alienate the reader from the story. A bad book does not have the elements-- like realistic or sensible characters or strong plots-- that make the reader crave for more. Second, a good book is entertaining, informative, and interesting all at the same time. Even though it is fiction or a creative piece of writing it should be applicable to real-world circumstances. A bad book, on the other hand, only tries to fulfill one sole purpose, either to entertain, inform, or fascinate. This sort of one-dimensional book eventually becomes bland and unexciting because of the monotony of its purpose. Third, a good book enhances the readers’ knowledge or appreciation of reality. It effectively challenges negative beliefs, like stereotypes, and creates new realizations for the reader. In other words, a good book is an effective eye-opener. Fourth, a good book does not use too many jargons. It is easy to understand. A bad book, on the other hand, is too com plicated. The writing style is unfriendly. And lastly, a good book is revolutionary. It introduces new ways of telling a story, creating characters, developing a plot, and ending a story. One book that is truly revolutionary, that is, it does not try to strictly follow the traditional standards of writing is Miguel de Cervantes’s Don Quixote. ... It does not need great intellect to understand the story. The central story is straightforward. But what is fascinating about this book is that it is not really a simple story, it is in fact very complicated if one will try to analyze it intently. The story has almost a flawless blending of effect. The plot, the symbols, and the characters all play a role in the overall theme. On the surface, the plot is uncomplicated and upholds what has been stated about the story’s subject matter in a smooth, subjective manner. In other words, the novel does not fail to involve its readers emotionally. One perfect example is the real emotions that the love affair between Gatsby and a rich girl creates. A guy falling in love with a rich girl sounds somewhat generic. But as the story progresses, the events become quite complicated, with betrayal and deception coming into the picture. The novel is entertaining and informative at the same time. The narrative structure of the novel is entertaini ng because Nick Carraway, the narrator, recounts the incidents not in the sequence they take place, but in the sequence Fitzgerald desires. It is informative because it raises awareness about the condition of the United States in the 1920s, more particularly, the effects of World War I on the nation (Fitzgerald 72). Lastly, the novel encourages the reader to reflect on the American Dream. Did life in contemporary Western civilization become devoid of any essential meaning? The Great Gatsby shows that the American Dream has become meaningless. As depicted in the novel, there is nothing left but a rough quest for riches and the shallow prestige that riches endow. Some rich people, like the Buchanan family, are discontented, bored, small-minded, and miserable. The