Accounting Question

• Identify the 3 submissions that you feel best exemplified your work during the semester. I already attach them in the file you have to convince my teacher why these are my best written paper. First, Second, third
• Identify a submission for which your views have changed or matured since you prepared it. Explain. attche in (appendix C)
• Identify 4-5 themes from the class and explain them. Why are these themes important? I identify them and you have to add the reference to this part ( note please attach for me each link or resource you use it because I want to check it .

Final Assignment
Your final assignment is to review your work from the semester and reflect on what you
have learned.
1. Identify the 3 submissions that you feel best exemplified your work during the
semester.
2. Identify a submission for which your views have changed or matured since you
prepared it. Explain.
3. Identify 4-5 themes from the class and explain them. Why are these themes important?
Submission Requirements
1. This is a formal report and should be prepared in a way that looks professional.
2. There should be an executive summary of no more than two pages.
3. The report should include headings and subheadings to make it easier to navigate.
4. The paper should be double-spaced.
5. The font should be 12-point Arial Narrow.
6. The document should be free of spelling and grammatical errors.
7. This is an individual assignment. You should not collaborate with anyone else.
8. There should be an unnumbered title page. The title page should include a title, your
name, the university name, the course name, and the date.
9. The first page of text should be page number 1.
Final project for Accounting Theory Class
Executive summary:
The three submissions that I consider to be my best well-written papers during
the semester do not only reflect my ability to write and understand accounting concepts
but also show my ability to think critically and express my opinion with clarity.
Firstly, I believe that my submission on supporting the FASB’s proposed ASU
turned into high-quality for me due to the fact I wrote it with a entire know-how of the
different components of this proposal. I wrote this paper from the point of view of a
graduate accounting student and a brand new investor within the capital market.
Therefore, my acknowledgment of the ability advantages for buyers, such as advanced
expertise of a enterprise entity’s performance, higher forecasting of future coins flows,
and the potential to compare performance over time and with different entities, proves
my complete grasp of the FASB’s proposed ASU.
Furthermore, my evaluation of the precise details that corporations might be
required to reveal underneath the proposed ASU. This, such as prices related to
depreciation, amortization, and workforce remuneration, reflects my knowledge of the
complexity involved in financial reporting. My emphasis on supplying investors with an
extra complete knowledge of the various charges associated with a commercial
enterprise highlights my dedication to transparency and knowledgeable decisionmaking.
My evaluation of the advantages and disadvantages of the proposed ASU on
expense disaggregation demonstrates a distinction understanding of the potential
impact on businesses. For example, I mention in my paper some advantages of the
proposed ASU on expense disaggregation in order to provide strong evidence of my
eagerness to raise the standards of financial reporting for increased reliability and
usefulness for investors (see Appendix A).
Secondly, my reflection paper at the idea of income demonstrates a stable draw
close of problematic accounting principles, specifically in expertise the definition of
income in keeping with the American Accounting Association and other perspectives.
For example, the paper no longer most effective very well outlines diverse accounting
principles but additionally meticulously highlights the inconsistencies of their software.
Furthermore, (see Appendix B).
Thirdly, the submission of the Accounting Principles Board reflection paper
presents my analytical skills in understanding and evaluating different accounting
alternatives(see Appendix C).
2- Identify a submission for which m views have changed or matured since you
prepared it. Explain.
My view has changed since I prepared Demand for Accounting Standards. The
process of accounting standard-setting has also revealed itself to be a multifaceted
endeavor, involving a diverse set of stakeholders with varying interests. I now
appreciate the challenges involved in balancing the needs of preparers, users, and
regulators, while considering the broader economic and social implications of
accounting standards (see appendix C).
3- Identify 4-5 themes from the class and explain them. Why are these themes
important?
1- financial accounting standards
The theme of financial accounting standards is important because it ensures
transparency, comparability, and reliability of financial information, which are essential
for decision-making by various stakeholders. Standard setting and the disclosure of
detailed financial information contribute to the efficient functioning of capital markets,
allocation of resources, and overall economic efficiency. Moreover, the theme highlights
the role of the FASB in addressing contemporary issues, such as expense
disaggregation, to meet the evolving information needs of investors and other users of
financial statements.
The Financial Accounting Standards Board (FASB) derives its authority from various
sources, including government regulators, report users, statement preparers, auditors,
and the Sarbanes-Oxley Act of 2002. The FASB’s standard-setting process involves
various structures and decision-making bodies, such as the FASB Board Members,
FASAC, PCC, and EITF.
2- Demand for Accounting Standards
Demand for accounting standards arises from the need for transparent,
consistent, and comparable financial reporting across companies and industries.
Accounting standards, such as the Generally Accepted Accounting Principles (GAAP) in
the United States and the International Financial Reporting Standards (IFRS)
internationally, provide a common set of principles, standards, and procedures that
define the basis of financial accounting policies and practices (Kenton, 23).
Accounting standards are crucial for several reasons. They provide a common
set of principles and procedures that define the basis of financial accounting policies
and practices, ensuring transparency and comparability of financial information across
firms and over time. Investors, regulatory agencies, and other external entities rely on
accounting standards to ensure that the financial information provided by an entity is
relevant and accurate (Kenton, 23).
3- The International Accounting Standards Committee (IASC)
4- ESG Reporting
Appendix A
Sep 3, 2023
Do you support the FASB’s proposed ASU? Why or why not?
I support the FASB’s proposed ASU because I think it will enhance the comparability
and transparency of financial statements, which will ultimately aid investors in better
understanding public business entity’s performance, forecasting future cash flows, and
contrasting that performance over time and with that of other entities.
Public business organizations would be obliged, under the proposed ASU, to provide
more details about their costs, including the kind of charge, its scope, its categorization,
and the factors influencing its amount. Depreciation, amortization, and staff
remuneration are just a few examples of the information that organizations would have
to report in more detail. Investors would be better able to comprehend the various costs
associated with a business and establish their own opinions on the performance of the
company with the addition of this information.
I think the advantages of the proposed ASU on Expense Disaggregation exceed the
disadvantages. First, the proposed ASU would be more challenging for businesses to
influence their financial outcomes. This is because the proposed ASU would require
public entities to disclose more ideally information and details about their expenses.
Second, the proposed ASU would require entities to identify and disaggregate relevant
expense captions in a tabular format disclosure in the notes to financial statements.
This would aid in raising the standard of financial reporting by making it more
trustworthy and beneficial. Overall, the proposed ASU, in my opinion, is a step in the
right direction in terms of raising the caliber of financial reporting.
Appendix B
Sep 26/23
According to the American Accounting Association’s Statement, the concept of
income is understood as the increase in an enterprise’s net assets. It is not solely an
increase in physical forms or money but also includes an increase in rights to property.
The nature of income is not explicitly defined, but it is implied that it is measured in terms
of original cost. The recognition of income varies depending on the circumstances, such
as in the case of sales, delivery of goods, or completion of services. Variations in the
recognition of income can lead to different income results for the same firm over the same
period of time. The bulletins by the American Institute of Accountants indicate that
accountants’ concepts of income vary in several aspects. For example, accountants
recognize revenue at the sales date, collection date, and construction date, but there is
no consistency in when each should be used.
Economic income is a concept of income that focuses on measuring an individual’s
or entity’s financial well-being based on their ability to consume without diminishing their
overall wealth over a specific period. It considers changes in net worth, accounting for
factors such as realized and unrealized gains or losses, changes in the value of tangible
and intangible assets, and the impact of income-producing activities. This concept
contrasts with traditional accounting income, which primarily relies on realized revenues
and expenses and may not fully capture an entity’s economic well-being. Economic
income is concerned with assessing an entity’s overall financial health and success by
considering a broader range of financial factors beyond immediate cash flows.
Sidney Alexander’s concept of variable income, as it applies to income from
securities, is equal to the net receipts from the security plus or minus any change in its
value that was, at the beginning of the period, expected to take place during the period.
In other words, variable income includes changes in the value of net worth that inevitably
result from the passage of time or are the result of the activities of the period. When we
examine the three income concepts (accounting income, economic income, and
Alexander’s proposal), it becomes evident that Alexander’s approach, which involves
reporting a variable income of $10 and an unexpected gain of $20, stands out as the most
informative choice for evaluating the bondholder’s investment performance for the year.
This method offers a more detailed breakdown of income sources and highlights
unexpected gains, enhancing its ability to provide insights.
In summary, I prefer Alexander’s concept of variable income as an alternative way
to define income, despite the challenge of quantifying it precisely. It is a more
comprehensive and informative measure of income than traditional accounting income or
economic income. It takes into account all changes in the value of an asset, including
both realized and unrealized gains. This provides a more accurate picture of the economic
well-being of an individual or entity and is more informative for users of financial
statements.
Appendix C
Oct 10th/ 23
What do you think is the best way to account for the investment tax credit?
Support your opinion.
In accordance with the Accounting Principles Board (APB), three accounting
alternatives exist for handling the investment tax credit. First, treat the tax credit as a
contribution to capital. This alternative was dismissed as irrational. Second, the “flowthrough” method: Under this approach, the tax credit would be used to reduce income
tax expenses in the period in which the credit arises. This would result in an immediate
increase in net income, which was desirable for the Kennedy administration. Third,
recording the credit as a reduction of the related asset: This alternative involved
spreading the recognition of the credit over the life of the asset as a reduction in
depreciation expense.
The Securities and Exchange Commission (SEC) as well as the APB accepted the
second and third methods in the case of the investment tax credit. Therefore, the
companies have the freedom to use either the reduction-of-cost method or the flowthrough method to account for the investment tax credit.
In my opinion, the reduction of cost method is the best way to account for the
investment tax credit. This method aligns with the principle of ensuring financial
statements comply with Generally Accepted Accounting Principles (GAAP). Moreover, it
offers an accurate portrayal of the long-term financial impact of the tax credit,
distributing the benefit of the tax credit in proportion to the asset’s contribution to
revenues over time. This is particularly advantageous when the asset contributes to
revenue generation over an extended period.
Appendix D
The development of accounting thought is important for me to grasp the evolution
of accounting concepts and theories across different eras, offering valuable insights into
how accounting has adapted and grown over time. Accounting industry developments
constitute a series of events that began with a period when accounting was primarily
influenced by early popular books and manuals until the growth of large railroads. This
enabled me to comprehend the situation of the industry now and how these events
assisted accounting in becoming a regulated profession with its own distinct framework.
The understanding of accounting thought sheds light on the conceptual foundations of
modern accounting principles and standards. For example, the distinction between
“primary” and “secondary” accounts led to the development of balance sheets and
income statements, representing a significant shift in accounting that facilitated external
communication and moved beyond ledger information solely intended for the business
proprietor’s use. This conception led to the establishment of a standardized framework
for financial reporting and opened the opportunity for further development in accounting.
Ultimately, the development of accounting ideas highlights the requirement for a steady
commitment to getting to know and progressing inside accounting because the
accounting profession is constantly evolving. Through the study of accounting thought, I
can gain a historical perspective on the evolution of accounting, insight into the reasons
behind changes in accounting principles, and a better understanding of the challenges
that accountants face nowadays.