Essays on Intermediate Accounting

Delta Airlines Inc. is a household brand not only the United States but also in 64 other countries around the world. The company was founded on May 30, 1924, marking a 91 years reign since it first opened doors as a crop dusting operation, Huff Daland Dusters, in Macon, Georgia. Delta started providing passenger services on June 17, 1929, making it one of the oldest airlines in the world. In 2013, Delta Airlines Inc. was reported to be the world's largest airline based on the number of scheduled passengers. The company was the second largest concerning the revenue passenger ...

Q1. Accounting standards play a significant role in the financial statements preparation process. The main international standard-setting organization is the International Accounting Standards Board (IASB) headquartered in London. It issues International Financial Reporting Standards (IFRS) which are used in more than 115 countries and is gaining acceptance in other states as well. These standards are also used on most foreign exchanges. Moreover, the IASB also issues framework for financial reporting and international financial reporting interpretations. Besides, the International Organization of Securities Commissions (IOSCO) also plays a significant role in the international standard-setting process. It doesn’t develop accounting standards, ...

It is rather difficult for businesspeople to make informed and wise decisions involving the risks, opportunities, and profitability of their ventures unless they have knowledge on the right tools and techniques to utilize. Entrepreneurs and corporations alike need not worry though because they are always take advantage of financial statements whenever they feel the need to examine the performance of their respective enterprises. Through income statements and balance sheets, for instance, businesses can immediately assess their profits, losses, assets, liabilities, and net worth at a given time. Nevertheless, evaluation of companies’ performance should never be limited with these fiscal records ...

CE18-2

The installment-sales method of recognizing revenue is not generally acceptable. Revenue should generally be accounted for at the time a transaction is completed because they are not recognized until realized and earned (ASC 605-25-3). The installment sales method accounts for sales that may extend payment periods and involves recording revenues in a specific proportion based on the criteria of cash collections (Carmichael and Graham, 2012). Thus, for these sales in which collectibility uncertainty is present, recognizing the revenue at the point of sale would overstate income and is not generally acceptable. However, ASC 605-25-4 accommodate for unique cases when the seller ...

Impairment of Assets and Goodwill

2(a) Why should asset impairment losses be accounted for in IFRS financial statements? Analyze the different circumstances that could indicate that an entity's assets may have been impaired.

Impairment of an asset occurs when the carrying value exceeds the actual recoverable amount of the asset (Norton, Diamond and Pagach, 2006, pp. 418). The carrying amount which is the amount reflected in the balance sheet is the original amount less the accumulated depreciation and impairment losses to date. The recoverable amount on the other hand refers to the amount that is higher of the assets fair value less associated selling ...