The historical cost accounting convention. - 2253 Words

INTRODUCTION Realised-profit, matching-based, historical cost accruals accounting (HCA) has for over fifty years been repeatedly challenged as being an inadequate basis for the measurement of income which reports increments in the value of businesses. Such challenges continue unabated and are made by both accounting standards regulators and by academic commentators. Despite its obvious deficiencies for measuring valuation based income, and subject to concept of prudence, internationally HCA remains the dominant basis for reporting and share prices appear to be influenced by reported earnings. This paper will go through few criticisms of our standard accounting model, look at possible alternatives and finally will provide a detailed†¦show more content†¦Opportunity costs are commonly used in economics and do not have much relevance here, however accounting bodies and academic commentators have forwarded new methods of accounting using the current asset value, as opposed to the conventional acquisition cost. Replacement costs could be used as a possible alternative to historical cost method. In crude terms Replacement costs (RC) may be defined as the estimated amount that would have to be paid in order to replace the asset as the date of valuation (Page 46,Lewis Pendrill, 2000). An advantage of replacement cost is that it focuses on the services the asset will provide rather than the precise physical asset. It therefore excludes speculative gains that might be made from selling a building to a purchaser who will redevelop it for an alternative use; equally it allows valuations to reflect the use that the current owner can make of an asset, even if a purchaser would not be able to employ the asset as profitably. However there is an immediate flaw noted in its definition, where the costs have to be estimated. Estimation has to be carried out after reviewing the asset, the market, and if an identical asset is still being traded in the market. Further difficulties inherent in the estimation are noted when the asset in the market is either not identical or obsolete. In these cases usually the replacement costs are much higher.Show MoreRelatedAdvantages and Disadvantages of Hstorical Cost Accounting1241 Words   |  5 PagesHstorical Cost Accounting Advantages and disadvantages of historical cost accounting, alternatives to historical cost accounting 2.1 Introduction Accounting concepts and conventions as used in accountancy are the rules and guidelines by which the accountant lives. The historical cost accounting convention is an accounting technique that values an asset for balance sheet purposes at the price paid for the asset at the time of its acquisition. The historical cost accounting is the situationRead MoreAccounting Concept and Conventions1685 Words   |  7 PagesACCOUNTING CONCEPT AND CONVENTIONS In drawing up accounting statements, whether they are external financial accounts or internally-focused management accounts, a clear objective has to be that the accounts fairly reflect the true substance of the business and the results of its operation. The theory of accounting has, therefore, developed the concept of a true and fair view. The true and fair view is applied in ensuring and assessing whether accounts do indeed portray accurately the businessRead MoreAccounting Research: Advantages of Cash Flow1720 Words   |  7 Pagesdependent on accounting conventions and concepts/principles * Cash flow reporting satisfies the needs of all users better since cash flow is more direct with its messages. 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The Historical cost convention has different uses andRead MoreThe principle of historical cost is still used in accounting when there is a large measure of agreement that it is inappropriate. Discuss.1226 Words   |  5 PagesSynopsis. Historical Cost Accounting is a traditional valuation method as it reflects only on the past cost of the asset, however in the contemporary business environment companies must remain flexible and transparent. This belief has lead to the creation of several other valuation methods, due to word constraints I have focused primarily on Fair Value Accounting as an alternative to Historical Cost Accounting. Although Fair value accounting is a theoretically superior valuation methodology, thereRead MoreAccounting Concepts, Conventions and Solutions3647 Words   |  15 PagesContents QUESTION ONE: Accounting Concepts and Conventions 1 a) Accounting Concepts 1 i) The going concern concept. 1 ii) The accruals concept (or matching concept) 1 iii) The entity concept: 3 iv) The money measurement concept: 3 v) The historical cost concept: 4 vi) The realization concept: 4 vii) Duality concept: 4 b) Accounting conventions 5 QUESTION TWO: Clashing accounting concepts and conventions that might bring about inconsistency in the accounting process 9 1. Clash betweenRead MoreEssay about Discuss the Need for Regulation in Financial Reporting1524 Words   |  7 Pagesfinancial reports in different ways. There are international differences in accounting practices. Accounting practices differ from country to country and so do the regulatory frame work and the balance between the public and private regulation. 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Fair value is not included in the measurement bases, but it is a widely used basis now, and it will be discussed with other measurements as below. 2.2 Measurement Bases ï‚ž Historical cost shows a prudent attitude to measure the past performance and net assets which are actually incurred. It is reliable when based on actual transactions. ï‚ž Current cost, just as its name implies, shows

Life History Essay - 3149 Words

Life History of Joanne Joanne was born in National Women’s Hospital, Auckland, New Zealand in October 1964. Joanne’s father worked full time as a plumber, her mother worked part time as a factory worker while also bringing up Joanne and her older brother. Joanne has spent all her life, from birth to present day, living in West Auckland. Joanne has never married and does not have any children. At the time of this interview Joanne is at the middle adulthood stage of her life. This life history follows Joanne’s life stages and identifies her major normative age graded events, normative history graded events and also non normative events, and reflects on the impact of these events on her development. Normative age graded influence included†¦show more content†¦Psychosocial Development This stage in Joanne’s life also was a time of shyness for Joanne. Joanne remembers her mother telling her that she would cry and cling to her mother or father when Joanne was given to someone (age graded normative event). Attachment theory states that attachment is a developmental process based on the evolved adaptive tendency for young children to maintain proximity to a familiar person, called the attachment figure (Bowlby, 1999). Joanne’s parents were authoritarian (Burton, Western Kowalski, 2009), placing high value on obedience and respect for authority, often not discussing why particular behaviours are important or listening to the child’s point of view. Joanne’s parents, particularly her mother often smacked her (history graded normative event) without discussion with Joanne of what she had done wrong. Middle and late childhood Physical Development Joanne continued to gain weight throughout her middle to late childhood (age graded non normative event). Girls are more likely than boys to be overweight (Santrock, 2008), also a change in Joanne’s diet may have caused her weight gain to continue, with the introduction of several major fast food restaurants (historic normative event) such as Kentucky Fried Chicken and McDonalds in the early 1970’s Joanne’s family was drawn to the easy access of this type of food. During this time the family alsoShow MoreRelatedMy Life History Essay1195 Words   |  5 Pages| My Life | The absolute true story of my life. | | Malik Flournoy | 8/22/2012 | U.S. History Mueller U.S. History Mueller | â€Å"Life is only as complicated as you make it,† my mom would always say to me. My life has been great so far, then bad at times. But in retrospect my life may seem better than others. Although that may be the case, my life isn’t as perfect as it may appear. 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Marketing intelligence in SMEs

Question: Flesh out a market plan for the product, discussing key elements of the 3 Cs and the 4 Ps. Identify Why you are choosing the strategies you choose and the interactions of the different strategic elements. Be specific and make necessary assumptions where appropriate.? Answer: Developing a marketing plan: Marketing involves a lot of preparation and also takes lot of time to develop an effective plan for any particular product in the market. A strong and developed marketing plan will help to ensure that what is to be scheduled and hoe much amount of funds are necessary to be spent so that a product could be developed into the market. It is necessary to build up a marketing plan because it does a lot to build up a product in the market. It involves everything to help to understand the target market and also seek to understand the competitive position in the market of that particular company or any particular product. It also helps to create a level of differentiation from the other competitors so that the company can make a sale out of the product as well as of the company. This also helps to achieve the marketing goals and objectives within a short span of time (Cacciolatti Fearne, 2013). The company had strategized and had planned to develop a pattern of computer display that comes with rigid rectangular surfaces that is the scroll type computers. If any individual wants to use a computer display then they can simply grab on the side of the tube and put the scroll out of the tube. The diameter is usually larger and all the electronics are within that particular tube. The size of the screen is usually based according to the length of the tube. These kind of displays are compatible with all the formats of the operating system and it comes with full HD color display as well. The scroll type monitors are considered to be 10% more expensive when compared with other type of displays that are available in the market. The sizes if such type of screens also needs to be compared with the other available monitor screens available in the market (Malhotra Dash, 2013). The target consumer market for such type of monitoring screen are very fragmented and there are few dominant players who come into the role and they play a significant role here. The technology is more updated with personal computer monitoring system. There are various other particular segments that customizes their own needs. There are students and other corporate travelers who come up with their own needs and these consumers tend to stay away from the desk and they are more aligned to use mobiles. They are in need of a high quality and stable monitor so that they can be saved from alien monsters like the corporate world desktops that have giant screen to work for. The computer monitor market is been said to be growing every year by 10 percent. But the margins after selling it is becoming very low (Okeudo Margaret, 2013). This happens mainly because of the fact that there is a need for customization and also of private label activity that is said to have taken place with personal c omputer manufacturers and some of it also takes place because of high sales promotional activities. The consumers need to purchase a new computer monitor every time whenever they purchases a new computer from the market. Proper business planning will necessarily ensure 3Cs and 4Ps as well in the market. These will help to exercise and make the exercise more valuable in terms of its other businesses. It helps to make a business well-structured and organized and helps a business to grow and sustain in an organized way as well. The 3Cs of a company are Company, customer and competition. On the other hand the 4PS are product, price, promotion and place. Company: the company matters a lot while developing any new product in the market. Here the product that is been discussed is scroll type personal computer displays. It is very important to see that what type of marketing and RD team is been there within the team so that they can help extensively in developing the new product and also help in promoting the new product in the market as well (Stosic, 2014). Customers: here the target customers are students and the corporate users those who are bored of using desktops. They were in need of a high quality and stable monitors so that they could be saved from the alien monsters of the corporate desktops. They were more aligned to use mobiles so that their work would just be a click away. Such customers were in need of a low desktop space and they required large screens for spreadsheets, email and also using word documents. Also there are general residential users who need such scroll type personal computer displays to use social media as a time of their leisure time. Also they required email answering and doing elementary school kid homework. People try to upgrade these screens as a part of their personal computers. Competition: The Company as well as the product received a tough competition. There were few dominant players who gave tough competition. It was important to differentiate the product as and when it is been compared with its competitors. The company being a small enterprise also received competition from the small players and the new entrants those who are coming in the market. The main reason that they received high competition because such scroll type displays were a bit expensive therefore not every people could afford with that much of ease and comfort. The 4Ps of the product are as follows: Product: the product is been designed in a shape of a tube apart from the usual ones that comes in a rectangular surfaces. If any individual wants to use a computer display the can simply grab the ring on the side of the tube and gently put the scroll out of the tube. The electronics that are present in the tube are also larger in diameter than as compared to a dry erase marker. The size of the screen is based on the length of the tube. The display comes along with visual of full color HD display. And such screens are compatible with all operating system formats ('Technology-Driven Online Marketing Performance Measurement: 2014). Price: When the sizes are been compared with the rigid computers these type of monitors are about 10 percent more expensive. These type of displays are expected to be sold in all the retail shops at a price between $400-$800 that is based on the size of the monitors and the screens as well. Place: place is determined by the demographic condition about the product that is been highlighted in the company. Here the major demographic segment includes the target customers who are students and the corporate users those who are bored of using desktops. They were in need of a high quality and stable monitors so that they could be saved from the alien monsters of the corporate desktops. They were more aligned to use mobiles so that their work would just be a click away. Such customers were in need of a low desktop space and they required large screens for spreadsheets, email and also using word documents. Promotion: These type of computer monitor market is been growing at 10 percent every year but the sales margins were low. The promotional activities mainly involved intensive sales promotions that are required to get the customers and they are instigated to buy new monitors every time whenever they purchase a new computer. References Cacciolatti, L. and Fearne, A. (2013). Marketing intelligence in SMEs: implications for the industry and policy makers.Mrkting Intelligence Plan, 31(1), pp.4-26. Malhotra, N. and Dash, S. (2013). Future of research in marketing in emerging economies.Mrkting Intelligence Plan, 31(2). Okeudo, G. and Margaret, O. (2013). The Impact of Marketing Mix (4Ps) on Warehousing Operations: Case Study of Unilever Nigeria PLC.American Journal of Business and Management, 2(2). Rahman, K. (2013). Wow! It's cool: the meaning of coolness in marketing.Mrkting Intelligence Plan, 31(6), pp.620-638. Rakonjac-Antic, T. (2013). Management of key pension plan risks from the user aspects.Marketing, 44(2), pp.128-136. Stosic, I. (2014). The role of marketing in corporate restructuring in crisis period.Marketing, 45(1), pp.41-49. Tapp, A. and Spotswood, F. (2013). From the 4Ps to COM-SM: reconfiguring the social marketing mix.Journal of Social Marketing, 3(3), pp.206-222. Technology-Driven Online Marketing Performance Measurement:. (2014).International Journal of Online Marketing, 4(4), pp.0-0.