Saturday, February 15, 2020

Provision Accounting and International Accounting Standards Essay

Provision Accounting and International Accounting Standards - Essay Example . It was for your convenience to figure out the definition) The trend of creating provisions under the conventional accounting practices was widely prevalent due to the fact that it allowed the companies to manipulate their earnings leading to misrepresentation of facts in the financial statements. This may relate to the "big bath" theory of accounting as defined by Healey (1985) as a method pervasively used by the companies in order to show more write offs of assets and also to project more accruals or provisions reflecting a reduction in earnings to the income statement, thus leading to the misrepresentation of the company's actual earnings. There may be several reasons behind the interest of management in the misleading reporting of the company's actual gains or losses. According to Kirschenheiter and Melumad (2002), the company's management may conceal the current years' profit or report less than actual gains with a view to report great hike in the company's profit in the future years. Abarbanell and Lehavy (2003) also confirm the same view regarding the management's discretion to conceal the company's profits. Another factor as discussed by Sikora (1999) in the case of mergers and acquisition, when new directors are appointed in the company and the management reports loss to project better management by the newly appointed directors in the future years. Healey (1985) also points out another cause for management to report less-than-actual earnings as being the expectation of change in bonus to the company's management. In this case, the company reports less than the actual increase in profit for the current year so a s to show a hike in profit the next year to earn better bonus for the management. Moore (1973) further relates the concept of "big bath" theory of accounting to the change in management factor. Beneish (2001) concludes that the chief objectives of management in managing the profit may be to create a balance and stability in the company's trend of earning profit or the company may manipulate its earnings at the time when its inflating its shares for the first time in the market in order to induce the shareholder by projecting a stabilised earnings record. All of the above-stated theories Healey (1985), Kirschenheiter and Melumad (2002), Sikora (1999), Moore (1973) and Beneish (2001) relate the use of provision accounting by the companies and their management to the theory of big bath accounting. Companies used it to affect the calculation as well as presentation and communication of the company's profits to its shareholder, investors, governmental authorities and other users of financial statements. Thus, they exploited the loopholes found in

Sunday, February 2, 2020

Human and Animal Interrelationships from Domestication to Present Term Paper - 2

Human and Animal Interrelationships from Domestication to Present - Term Paper Example Also, Romans relied on various provinces they had acquired after wars for agriculture yet most of their focus was on Italy which was quite suitable for a wide variety of crops (Jhonston 55-56). Also, many Romans during the era were fond of purchasing Italian crops. Furthermore, land ownership was the means to constitute a part of the aristocracy in Rome; the more land a person acquired to higher his esteem in society and politics was. Even the brave soldiers were allocated land as rewards for their services. Land was also the sole factor behind slave labor since men were enslaved to work of these fields. Thus, agriculture was the dominant factor behind every aspect of Roman life and the paper aims at exploring how the Romans farmed to understand their values more. In order to understand how the Romans farmed, it is significant to study the phases in which these Romans evolved. Back in the 5th Century, there were small pieces of land owned by families in Rome. However, by that time the technique of crop rotation had become popular and Romans were indulged in estates to further enhance their wealth. Furthermore, the interactions amongst Romans and other advanced nations like Greece had improved already which also contributed towards perfecting the agricultural techniques to reap better crops. During the early empire era, the agricultural practices in Rome were at its peak and there was immense efficiency in the crops yield. Studies indicate that farms in Rome can be classified in three different forms. Smalls farms constituted an area of 18-108 iugera while medium range farms were around 80 to 500 iugera in size. However, large estates constituted an area as large as 500 iugera (Jhonston 33-34). Thus, those peasants who owned small sized farms didn’t have the technology or the resources to earn a living via their lands. The wealthy land owners saw it as an opportunity and bought lands from the