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FINANCIAL ACCOUNTING CONCEPTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IMPORTANCE OF FINANCIAL ACCOUNTING STANDARDS
 

The Accounting Standard Board (ASB), working jointly with the European Financial Reporting Advisory Group (EFRAG), has published recommendations on the standard setting process and the effects of accounting standards on all user groups.

 

Board of directors: The Financial Reporting Council (FRC) has issued guidance for the board of directors assisting them to lead their companies in the most efficient manner. The guidance addresses issues such as:

  • Roles of chairman, directors and the company secretary;
  • Decision making policies and processes;
  • Board composition and succession planning; and
  • Evaluating the performance of the board of directors.

 

The board of Johnson Matthey is actively engaged in ongoing succession planning in order to ensure plans are in place and the board is also following the principle of committee evaluation process announced by FRC in October 2011.

 

Stockholders and Creditors: Financial Reporting Standards provide financial information to stockholders and creditors about the reporting entity which helps them in making decisions about providing resources to the entity and their expectations about returns depend on their assessment of future net cash inflows to the entity.

 

Johnson Matthey openly engages with its stakeholders and reports formally to them. The Chairman takes overall responsibility that the views of stakeholders are communicated to the board.

 

KPMG Audit Plc: The Ethical Standards of the Auditing Practices Board (APB) constituted by FRC address both personal and firm independence requirements and helps KPMG Audit Plc to have clear policies and processes in place and apply them consistently. It is responsible for monitoring the integrity of the group’s reported financial information and reviewing financial reporting issues and judgments which they contain.

Resolutions are to be proposed at the 2012 Annual General Meeting for the reappointment of KPMG Audit Plc as auditor of Johnson Matthey (Deloitte Accounting Standard Brief).

 

EXPLANATORY NOTES

 

The explanatory notes to Johnson’s financial statements covers subjects like the segmental information, major impairment and restructuring charges, earnings per ordinary share, share-based payments, post-employment benefits, provisions and contingent liabilities, deferred taxation, inventories etc.

 

The notes to financial statements provide adequate disclosure of important facts about the company that would not be obvious simply by reviewing the financial statements. They help in explaining specific items in the financial statements and also provide a more comprehensive assessment of company’s financial condition. The notes clarify individual statement line-items and are necessary in the presentation of financial statements (Michael C. Dennis, 2009).       

 

LIMITATIONS OF JOHNSON’S INCOME STATEMENT

 

Johnson matthey’s revenue is affected by rising commodity costs, as a result of which the profit margins for its precious metals division is lowered, and increased emissions trading regulation, which creates business for its environmental technologies division. The price of energy and commodity raw materials (such as platinum group metals, steel, etc.) has risen in the past few years. For example, the cost of European hot-rolled steel coil rose 25% in the first quarter of 2010 because of increased demand and less production. Any disruption in the supply and price of commodities can decrease Johnson matthey’s profitability as it relies on commodity supplies for its precious metal products and it is also not able to immediately pass on higher costs to its customers.

 

From the annual report we can see that the revenue of the precious metals division has increased by only 19% in 2011-12 as compared to an increase of 33% in 2010-11 and its sales have increased only 8%  as compared to 19% in 2010-11.The global demand for platinum has increased by only 2% in 2011 as compared to an increase of 16% in 2010.Even the sales in the division’s Services businesses grew only by 10% in 2011 as compared to 20% in 2010 (Wiki analysis of Johnson Matthey Plc).

 

VALUATION OF INVENTORIES

 

Assuming that during 2011-12 Johnson’s purchase costs are steadily increasing, then FIFO (First-In, First-Out) method of inventory valuation results in the highest reported profit because inventory that might be several years old is used to value the cost of goods sold.

 

When prices are increasing, then LIFO (Last-In, First-Out) method of inventory valuation results in lowest taxable income.

“Lower of cost or market” valuation method is closest to current replacement cost. When the value of inventory is lower than the cost, the inventory is written down to its market value. Market is defined as replacement cost or net realizable value (Inventory Valuation for Investors: FIFO and LIFO, 2010).

 

FIFO V.S LIFO

 

The difference between FIFO and LIFO is the way that the inventory that gets sold is priced. When FIFO method is used, the income statement shows a higher income because the Cost of Goods Sold (COGS) is valued at a lower amount. When LIFO method is used, the income statement shows a lower income because the COGS are valued at a higher amount.

The retained earnings statement will show a higher retained earnings value if FIFO method is used (Inventory Valuation for Investors: FIFO and LIFO, 2010).

 

PRINCIPLE OF CONSISTENCY

 

The same method of inventory valuation shall be used for all inventories having a similar nature and use to the entity. For inventories with a different nature or use, using different methods of inventory valuation may be justified. For example, inventories used in one business segment may be of a different use to the entity as compared to the same type of inventories used in another business segment. Merely the location of inventories in different geographical regions is not sufficient to justify the use of different methods of inventory valuation. Thus the concurrent use of two inventory methods does not indicate that Johnson is violating the accounting principle of consistency (Mscuttle, 2008) & (Accounting Standard Board, May 2002).

 

INTERNAL CONTROL OVER CASH RECEIPTS

 

The Cash receipts are a result of cash sales made by an organization which includes collections from customers for products sold to them or for services provided, the interests received, rents, and dividends, from investments by the owners, loans from bank and the proceeds from the sale of non-current assets.

 

The following are the principles to be adopted by Johnson in establishing strong internal control over the cash receipts:

 

  • The Establishment of responsibility - Only personnel (cashiers) who are designated shall be authorized to handle cash receipts.

 

  • Segregation of duties – The duties shall be divided properly. Different individuals should be responsible to receive cash, to record cash receipts, and hold the cash.

 

  • Procedure for documentation – Usage of remittance advice (mail receipts), cash register tapes, and deposit slips should be done properly.

 

  • Physical, mechanical, and electronic controls – The cash should be stored in safes and bank vaults. Limitation on access to storage areas and use of cash registers.

 

  • Independent internal verification - Supervisors are responsible to count cash receipts daily; the treasurer is responsible for comparing the total receipts to bank deposits daily.

 

  • Other controls - The Bond personnel who handle cash who require vacation, shall deposit all cash in bank daily.

 

(Internal Control and cash)

 

ALLOWANCE FOR DOUBTFUL ACCOUNTS

 

The adjusting entry to create or increase the allowance for doubtful accounts involves the recognition of an expense. In multiple-step income statement, it is to be presented as a selling expense.

 

In cash flow statement, there will be no effect as no cash flows are involved.

 

MARKETABLE SECURITIES ACCOUNT

 

The adjusting entry to increase the balance in the marketable securities account to a higher value affects only the balance sheet. In multiple-step statement, there will be no effect as it appears in the balance sheet and not in the income statement. In cash flow statement also there will be no effect as no cash flows are involved.

 

ACCOUNTS RECEIVABLES

 

The accounts receivable collection period measures the average number of days that accounts receivable are outstanding. It measures the average number of days between the sending of invoices to the customers and collecting payments from them.

 

The accounts receivable of Johnson on average was 22.52 days. This implied that the revenues were not being collected in an efficient manner (Financial Statements for Johnson Matthey Plc, JMAT)

 

MATCHING PRINCIPLE

 

As per the matching principle the expenses should be recognized in the same accounting period as are the revenues generated, i.e. to match the revenues and expenses. The matching principle is the reason for using accrual basis for accounting (Adjustments for Financial Reporting).

 

DEPRECIATION ON BUILDING

 

The company should continue to provide depreciation. Instead the asset shall be revalued to bring it at par with the current market value. Where the original cost of an asset undergoes a change due to revaluation, the depreciation on the revised unamortized depreciable amount is provided prospectively over the residual useful life of an asset.

 

IMPAIRMENT OF AN ASSET

 

If carrying amount of an asset is more than its recoverable amount then the difference is called impairment loss. Carrying amount is the written down value of the asset i.e. book value of the asset. Recoverable amount is the higher of its fair value less costs to sell and its value in use.

During the year ended 31st March 2011 Johnson closed its Haverton manufacturing site Billingham, UK. This gave rise to a pre tax impairment. The impairment loss will be transferred to Profit & Loss account.

 

GOODWILL

 

Goodwill is the amount paid to acquire a company which is in excess of its net assets over its fair market value. The excess payment is due to the value of company's reputation, its location, the list of customer of the company, the management team, or other intangible factors. Goodwill may be recorded only after the occurrence of purchase of a company because such type of transaction provides an objective measure of goodwill as recognized by the purchaser.

PLANT AND EQUIPMENT

 

If Johnson’s item is held for sale in the regular course of business then it will be prevented from being included in the classification of plant and equipment as IAS 16 does not apply to assets as held for sale (Summary of IAS 16-Revenue based Depreciation and amortization).

 

DEPRECIATION

 

The depreciation methods used in Johnson’s annual report are not determined by current income tax laws. It is the responsibility of the entity to select the method that most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset and to disclose the method they choose and use it consistently for the life of the assets unless there is a change in the expected pattern of consumption of those future economic benefits.

 

If two assets have different pattern of consumption then they should be depreciated using different methods. Johnson does not violate the consistency principle by using different depreciation methods for its assets. The consistency principle states that once an accounting principle or method is adopted, then it should be consistently followed in future accounting periods.

 

The estimated depreciation rate of freehold building is 10% and of plant and equipment is 15%.

 

The company itself determines the useful lives over which specific assets are to be depreciated. (Guide to valuation and depreciation under IAS).

 

 

 

 

 

 

References:
 

1) Deloitte-Accounting Standard Brief, Available from:

http://www.deloitte.com/assets/Dcom-Ireland/Local%20Assets/Documents/Audit/ie_A_FRB_0311_Draft3_web.pdf

 

2) International Accounting Reporting Standards

http://www.ifrs.org/Documents/QassimHandout.pdf

 

3) Michael C. Dennis, 2009, Available from:    

http://www.encyclopediaofcredit.com/Notes-to-the-Financial-Statements

 

4) Wiki analysis of Johnson Matthey Plc, Available from:

http://www.wikinvest.com/stock/Johnson_Matthey_(JMAT)

 

5) Inventory Valuation for Investors: FIFO and LIFO, 2010, Available from:

http://www.investopedia.com/articles/02/060502.asp#axzz2Ckd9CfQc

 

6) Inventory Valuation – Mscuttle, 2008, Available from:

http://www.slideshare.net/mscuttle/inventory-valuation-presentation

 

7) Accounting Standard Board, May 2002, Available from:

http://www.frc.org.uk/getattachment/a5272057-3f46-46bb-b472-d4c54182aecf/FRED-28-Inventories-Construction-and-Service-Contracts.aspx

 

8) Internal Control and Cash, Available from:

http://www.csulb.edu/~mdchase/500CashandInternalControl.pdf

 

9) Financial Assets, Available from:

http://capital2.capital.edu/faculty/lmitterm/211solutions7-03.pdf

 

 

10) Financial Statements for Johnson Matthey Plc (JMAT), Available from:

http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=JMAT:LN&dataset=balanceSheet&period=A&currency=native

 

11) Adjustments for Financial Reporting, Available from:

vrpacioli.loyola.edu/ac101/chapter3/chapter3.ppt

 

12) Summary of IAS 16-Revenue based Depreciation and amortization, Available from:

http://www.iasplus.com/en/standards/standard14

 

13) Guide to valuation and depreciation under IAS, Available from:

http://www.cpaaustralia.com.au/documents/valuation-and-depreciation-public-sector.pdf

 

14) The Consistency Principle, Available from:

http://www.accountingtools.com/consistency-principle

 

15) Depreciation Accounting, Available from:

http://business.yourdictionary.com/articles/explain-depreciation-accounting.html

 

 

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FINANCIAL xxxxxxx CONCEPTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IMPORTANCE OF xxxxxxx ACCOUNTING STANDARDS

 

Board xxxxxxx directors: The xxxxxxx Reporting Council xxxxxxx has xxxxxxx xxxxxxx for the xxxxxxx of directors xxxxxxx them to xxxxxxx their companies xxxxxxx the most xxxxxxx manner. The xxxxxxx xxxxxxx issues xxxxxxx as:

  • Roles of xxxxxxx directors and xxxxxxx company xxxxxxx xxxxxxx policies and xxxxxxx composition and xxxxxxx planning; and
  • Evaluating xxxxxxx performance of xxxxxxx board of xxxxxxx board of xxxxxxx xxxxxxx is xxxxxxx engaged in xxxxxxx succession planning xxxxxxx order xxxxxxx xxxxxxx plans are xxxxxxx place and xxxxxxx board is xxxxxxx following the xxxxxxx of committee xxxxxxx process announced xxxxxxx xxxxxxx in xxxxxxx 2011.

     

    Stockholders and xxxxxxx Financial Reporting xxxxxxx provide xxxxxxx xxxxxxx to stockholders xxxxxxx creditors about xxxxxxx reporting entity xxxxxxx helps them xxxxxxx making decisions xxxxxxx providing resources xxxxxxx xxxxxxx entity xxxxxxx their expectations xxxxxxx returns depend xxxxxxx their xxxxxxx xxxxxxx future net xxxxxxx inflows to xxxxxxx entity.

     

    Johnson Matthey xxxxxxx engages with xxxxxxx stakeholders and xxxxxxx formally to xxxxxxx xxxxxxx Chairman xxxxxxx overall responsibility xxxxxxx the views xxxxxxx stakeholders xxxxxxx xxxxxxx to the xxxxxxx Audit Plc: xxxxxxx Ethical Standards xxxxxxx the Auditing xxxxxxx Board (APB) xxxxxxx by FRC xxxxxxx xxxxxxx personal xxxxxxx firm independence xxxxxxx and helps xxxxxxx Audit xxxxxxx xxxxxxx have clear xxxxxxx and processes xxxxxxx place and xxxxxxx them consistently. xxxxxxx is responsible xxxxxxx monitoring the xxxxxxx xxxxxxx the xxxxxxx reported financial xxxxxxx and reviewing xxxxxxx reporting xxxxxxx xxxxxxx judgments which xxxxxxx contain.

    Resolutions are xxxxxxx be proposed xxxxxxx the 2012 xxxxxxx General Meeting xxxxxxx the reappointment xxxxxxx xxxxxxx Audit xxxxxxx as auditor xxxxxxx Johnson Matthey xxxxxxx Accounting xxxxxxx xxxxxxx NOTES

     

    The explanatory xxxxxxx to Johnson’s xxxxxxx statements covers xxxxxxx like the xxxxxxx information, major xxxxxxx and restructuring xxxxxxx xxxxxxx per xxxxxxx share, share-based xxxxxxx post-employment benefits, xxxxxxx and xxxxxxx xxxxxxx deferred taxation, xxxxxxx etc.

     

    The notes xxxxxxx financial statements xxxxxxx adequate disclosure xxxxxxx important facts xxxxxxx the company xxxxxxx xxxxxxx not xxxxxxx obvious simply xxxxxxx reviewing the xxxxxxx statements. xxxxxxx xxxxxxx in explaining xxxxxxx items in xxxxxxx financial statements xxxxxxx also provide xxxxxxx more comprehensive xxxxxxx of company’s xxxxxxx xxxxxxx The xxxxxxx clarify individual xxxxxxx line-items and xxxxxxx necessary xxxxxxx xxxxxxx presentation of xxxxxxx statements (Michael xxxxxxx Dennis, 2009).       

     

    LIMITATIONS xxxxxxx JOHNSON’S INCOME xxxxxxx matthey’s revenue xxxxxxx affected by xxxxxxx xxxxxxx costs, xxxxxxx a result xxxxxxx which the xxxxxxx margins xxxxxxx xxxxxxx precious metals xxxxxxx is lowered, xxxxxxx increased emissions xxxxxxx regulation, which xxxxxxx business for xxxxxxx environmental technologies xxxxxxx xxxxxxx price xxxxxxx energy and xxxxxxx raw materials xxxxxxx as xxxxxxx xxxxxxx metals, steel, xxxxxxx has risen xxxxxxx the past xxxxxxx years. For xxxxxxx the cost xxxxxxx European hot-rolled xxxxxxx xxxxxxx rose xxxxxxx in the xxxxxxx quarter of xxxxxxx because xxxxxxx xxxxxxx demand and xxxxxxx production. Any xxxxxxx in the xxxxxxx and price xxxxxxx commodities can xxxxxxx Johnson matthey’s xxxxxxx xxxxxxx it xxxxxxx on commodity xxxxxxx for its xxxxxxx metal xxxxxxx xxxxxxx it is xxxxxxx not able xxxxxxx immediately pass xxxxxxx higher costs xxxxxxx its customers.

     

    From xxxxxxx annual report xxxxxxx xxxxxxx see xxxxxxx the revenue xxxxxxx the precious xxxxxxx division xxxxxxx xxxxxxx by only xxxxxxx in 2011-12 xxxxxxx compared to xxxxxxx increase of xxxxxxx in 2010-11 xxxxxxx its sales xxxxxxx xxxxxxx only xxxxxxx as compared xxxxxxx 19% in xxxxxxx global xxxxxxx xxxxxxx platinum has xxxxxxx by only xxxxxxx in 2011 xxxxxxx compared to xxxxxxx increase of xxxxxxx in 2010.Even xxxxxxx xxxxxxx in xxxxxxx division’s Services xxxxxxx grew only xxxxxxx 10% xxxxxxx xxxxxxx as compared xxxxxxx 20% in xxxxxxx (Wiki analysis xxxxxxx Johnson Matthey xxxxxxx OF INVENTORIES

     

    Assuming xxxxxxx during 2011-12 xxxxxxx xxxxxxx costs xxxxxxx steadily increasing, xxxxxxx FIFO (First-In, xxxxxxx method xxxxxxx xxxxxxx valuation results xxxxxxx the highest xxxxxxx profit because xxxxxxx that might xxxxxxx several years xxxxxxx is used xxxxxxx xxxxxxx the xxxxxxx of goods xxxxxxx prices are xxxxxxx then xxxxxxx xxxxxxx First-Out) method xxxxxxx inventory valuation xxxxxxx in lowest xxxxxxx income.

    “Lower of xxxxxxx or market” xxxxxxx method is xxxxxxx xxxxxxx current xxxxxxx cost. When xxxxxxx value of xxxxxxx is xxxxxxx xxxxxxx the cost, xxxxxxx inventory is xxxxxxx down to xxxxxxx market value. xxxxxxx is defined xxxxxxx replacement cost xxxxxxx xxxxxxx realizable xxxxxxx (Inventory Valuation xxxxxxx Investors: FIFO xxxxxxx LIFO, xxxxxxx xxxxxxx LIFO

     

    The difference xxxxxxx FIFO and xxxxxxx is the xxxxxxx that the xxxxxxx that gets xxxxxxx is priced. xxxxxxx xxxxxxx method xxxxxxx used, the xxxxxxx statement shows xxxxxxx higher xxxxxxx xxxxxxx the Cost xxxxxxx Goods Sold xxxxxxx is valued xxxxxxx a lower xxxxxxx When LIFO xxxxxxx is used, xxxxxxx xxxxxxx statement xxxxxxx a lower xxxxxxx because the xxxxxxx are xxxxxxx xxxxxxx a higher xxxxxxx retained earnings xxxxxxx will show xxxxxxx higher retained xxxxxxx value if xxxxxxx method is xxxxxxx xxxxxxx Valuation xxxxxxx Investors: FIFO xxxxxxx LIFO, 2010).

     

    PRINCIPLE xxxxxxx CONSISTENCY

     

    The xxxxxxx xxxxxxx of inventory xxxxxxx shall be xxxxxxx for all xxxxxxx having a xxxxxxx nature and xxxxxxx to the xxxxxxx xxxxxxx inventories xxxxxxx a different xxxxxxx or use, xxxxxxx different xxxxxxx xxxxxxx inventory valuation xxxxxxx be justified. xxxxxxx example, inventories xxxxxxx in one xxxxxxx segment may xxxxxxx of a xxxxxxx xxxxxxx to xxxxxxx entity as xxxxxxx to the xxxxxxx type xxxxxxx xxxxxxx used in xxxxxxx business segment. xxxxxxx the location xxxxxxx inventories in xxxxxxx geographical regions xxxxxxx not sufficient xxxxxxx xxxxxxx the xxxxxxx of different xxxxxxx of inventory xxxxxxx Thus xxxxxxx xxxxxxx use of xxxxxxx inventory methods xxxxxxx not indicate xxxxxxx Johnson is xxxxxxx the accounting xxxxxxx of consistency xxxxxxx xxxxxxx & xxxxxxx Standard Board, xxxxxxx 2002).

     

    INTERNAL CONTROL xxxxxxx CASH xxxxxxx xxxxxxx receipts are xxxxxxx result of xxxxxxx sales made xxxxxxx an organization xxxxxxx includes collections xxxxxxx customers for xxxxxxx xxxxxxx to xxxxxxx or for xxxxxxx provided, the xxxxxxx received, xxxxxxx xxxxxxx dividends, from xxxxxxx by the xxxxxxx loans from xxxxxxx and the xxxxxxx from the xxxxxxx of non-current xxxxxxx xxxxxxx are xxxxxxx principles to xxxxxxx adopted by xxxxxxx in xxxxxxx xxxxxxx internal control xxxxxxx the cash xxxxxxx Establishment of xxxxxxx - Only xxxxxxx (cashiers) who xxxxxxx designated shall xxxxxxx xxxxxxx to xxxxxxx cash receipts.

 

  • Procedure xxxxxxx documentation – xxxxxxx of remittance xxxxxxx (mail xxxxxxx xxxxxxx register tapes, xxxxxxx deposit slips xxxxxxx be done xxxxxxx style="margin-left:14.2pt;"> 

    • Physical, mechanical, xxxxxxx electronic controls xxxxxxx The cash xxxxxxx xxxxxxx stored xxxxxxx safes and xxxxxxx vaults. Limitation xxxxxxx access xxxxxxx xxxxxxx areas and xxxxxxx of cash xxxxxxx style="margin-left:14.2pt;"> 

      • Independent internal xxxxxxx - Supervisors xxxxxxx responsible to xxxxxxx cash receipts xxxxxxx xxxxxxx treasurer xxxxxxx responsible for xxxxxxx the total xxxxxxx to xxxxxxx xxxxxxx daily.

       

      • Other xxxxxxx - The xxxxxxx personnel who xxxxxxx cash who xxxxxxx vacation, shall xxxxxxx all cash xxxxxxx xxxxxxx daily.

       

      (Internal xxxxxxx and cash)

       

      The xxxxxxx xxxxxxx to create xxxxxxx increase the xxxxxxx for doubtful xxxxxxx involves the xxxxxxx of an xxxxxxx In multiple-step xxxxxxx xxxxxxx it xxxxxxx to be xxxxxxx as a xxxxxxx expense.

       

      MARKETABLE xxxxxxx ACCOUNT

       

      The xxxxxxx xxxxxxx to xxxxxxx the balance xxxxxxx the marketable xxxxxxx account xxxxxxx xxxxxxx higher value xxxxxxx only the xxxxxxx sheet. In xxxxxxx statement, there xxxxxxx be no xxxxxxx as it xxxxxxx xxxxxxx the xxxxxxx sheet and xxxxxxx in the xxxxxxx statement. xxxxxxx xxxxxxx flow statement xxxxxxx there will xxxxxxx no effect xxxxxxx no cash xxxxxxx are involved.

       

      The accounts xxxxxxx xxxxxxx period xxxxxxx the average xxxxxxx of days xxxxxxx accounts xxxxxxx xxxxxxx outstanding. It xxxxxxx the average xxxxxxx of days xxxxxxx the sending xxxxxxx invoices to xxxxxxx customers and xxxxxxx xxxxxxx from xxxxxxx accounts receivable xxxxxxx Johnson on xxxxxxx was xxxxxxx xxxxxxx This implied xxxxxxx the revenues xxxxxxx not being xxxxxxx in an xxxxxxx manner (Financial xxxxxxx for Johnson xxxxxxx xxxxxxx JMAT)

       

      MATCHING xxxxxxx per the xxxxxxx principle the xxxxxxx should xxxxxxx xxxxxxx in the xxxxxxx accounting period xxxxxxx are the xxxxxxx generated, i.e. xxxxxxx match the xxxxxxx and expenses. xxxxxxx xxxxxxx principle xxxxxxx the reason xxxxxxx using accrual xxxxxxx for xxxxxxx xxxxxxx for Financial xxxxxxx ON BUILDING

       

      The xxxxxxx should continue xxxxxxx provide depreciation. xxxxxxx the asset xxxxxxx be revalued xxxxxxx xxxxxxx it xxxxxxx par with xxxxxxx current market xxxxxxx Where xxxxxxx xxxxxxx cost of xxxxxxx asset undergoes xxxxxxx change due xxxxxxx revaluation, the xxxxxxx on the xxxxxxx unamortized depreciable xxxxxxx xxxxxxx provided xxxxxxx over the xxxxxxx useful life xxxxxxx an xxxxxxx xxxxxxx AN ASSET

       

      If xxxxxxx amount of xxxxxxx asset is xxxxxxx than its xxxxxxx amount then xxxxxxx difference is xxxxxxx xxxxxxx loss. xxxxxxx amount is xxxxxxx written down xxxxxxx of xxxxxxx xxxxxxx i.e. book xxxxxxx of the xxxxxxx Recoverable amount xxxxxxx the higher xxxxxxx its fair xxxxxxx less costs xxxxxxx xxxxxxx and xxxxxxx value in xxxxxxx the year xxxxxxx 31st xxxxxxx xxxxxxx Johnson closed xxxxxxx Haverton manufacturing xxxxxxx Billingham, UK. xxxxxxx gave rise xxxxxxx a pre xxxxxxx impairment. The xxxxxxx xxxxxxx will xxxxxxx transferred to xxxxxxx & Loss xxxxxxx is xxxxxxx xxxxxxx paid to xxxxxxx a company xxxxxxx is in xxxxxxx of its xxxxxxx assets over xxxxxxx fair market xxxxxxx xxxxxxx excess xxxxxxx is due xxxxxxx the value xxxxxxx company's xxxxxxx xxxxxxx location, the xxxxxxx of customer xxxxxxx the company, xxxxxxx management team, xxxxxxx other intangible xxxxxxx Goodwill may xxxxxxx xxxxxxx only xxxxxxx the occurrence xxxxxxx purchase of xxxxxxx company xxxxxxx xxxxxxx type of xxxxxxx provides an xxxxxxx measure of xxxxxxx as recognized xxxxxxx the purchaser.

      PLANT xxxxxxx EQUIPMENT

       

      If Johnson’s xxxxxxx xxxxxxx held xxxxxxx sale in xxxxxxx regular course xxxxxxx business xxxxxxx xxxxxxx will be xxxxxxx from being xxxxxxx in the xxxxxxx of plant xxxxxxx equipment as xxxxxxx 16 does xxxxxxx xxxxxxx to xxxxxxx as held xxxxxxx sale (Summary xxxxxxx IAS xxxxxxx xxxxxxx Depreciation and xxxxxxx depreciation methods xxxxxxx in Johnson’s xxxxxxx report are xxxxxxx determined by xxxxxxx income tax xxxxxxx xxxxxxx is xxxxxxx responsibility of xxxxxxx entity to xxxxxxx the xxxxxxx xxxxxxx most closely xxxxxxx the expected xxxxxxx of consumption xxxxxxx the future xxxxxxx benefits embodied xxxxxxx the asset xxxxxxx xxxxxxx disclose xxxxxxx method they xxxxxxx and use xxxxxxx consistently xxxxxxx xxxxxxx life of xxxxxxx assets unless xxxxxxx is a xxxxxxx in the xxxxxxx pattern of xxxxxxx of those xxxxxxx xxxxxxx benefits.

       

      If xxxxxxx assets have xxxxxxx pattern of xxxxxxx then xxxxxxx xxxxxxx be depreciated xxxxxxx different methods. xxxxxxx does not xxxxxxx the consistency xxxxxxx by using xxxxxxx depreciation methods xxxxxxx xxxxxxx assets. xxxxxxx consistency principle xxxxxxx that once xxxxxxx accounting xxxxxxx xxxxxxx method is xxxxxxx then it xxxxxxx be consistently xxxxxxx in future xxxxxxx periods.

       

      The estimated xxxxxxx rate of xxxxxxx xxxxxxx is xxxxxxx and of xxxxxxx and equipment xxxxxxx 15%.

       

      The xxxxxxx xxxxxxx determines the xxxxxxx lives over xxxxxxx specific assets xxxxxxx to be xxxxxxx (Guide to xxxxxxx and depreciation xxxxxxx xxxxxxx />  

      1) xxxxxxx Standard Brief, xxxxxxx from:

      http://www.deloitte.com/assets/Dcom-Ireland/Local%20Assets/Documents/Audit/ie_A_FRB_0311_Draft3_web.pdf

       

      2) International xxxxxxx Reporting xxxxxxx xxxxxxx C. Dennis, xxxxxxx Available from:    

      http://www.encyclopediaofcredit.com/Notes-to-the-Financial-Statements

       

      4) xxxxxxx analysis of xxxxxxx Matthey Plc, xxxxxxx from:

      http://www.wikinvest.com/stock/Johnson_Matthey_(JMAT)

       

      5) Inventory xxxxxxx for Investors: xxxxxxx xxxxxxx LIFO, xxxxxxx Available from:

      http://www.investopedia.com/articles/02/060502.asp#axzz2Ckd9CfQc

       

      6) xxxxxxx Valuation – xxxxxxx 2008, xxxxxxx xxxxxxx Accounting Standard xxxxxxx May 2002, xxxxxxx from:

      http://www.frc.org.uk/getattachment/a5272057-3f46-46bb-b472-d4c54182aecf/FRED-28-Inventories-Construction-and-Service-Contracts.aspx

       

      8) Internal xxxxxxx and Cash, xxxxxxx from:

      http://www.csulb.edu/~mdchase/500CashandInternalControl.pdf

       

      9) Financial xxxxxxx Available from:

      http://capital2.capital.edu/faculty/lmitterm/211solutions7-03.pdf

       

       

      10) xxxxxxx xxxxxxx for xxxxxxx Matthey Plc xxxxxxx Available from:

      http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=JMAT:LN&dataset=balanceSheet&period=A&currency=native

       

      11) xxxxxxx for xxxxxxx xxxxxxx Available from: xxxxxxx Summary of xxxxxxx 16-Revenue based xxxxxxx and amortization, xxxxxxx from:

      http://www.iasplus.com/en/standards/standard14

       

      13) Guide xxxxxxx valuation and xxxxxxx xxxxxxx IAS, xxxxxxx from:

      http://www.cpaaustralia.com.au/documents/valuation-and-depreciation-public-sector.pdf

       

      14) The xxxxxxx Principle, Available xxxxxxx Depreciation xxxxxxx xxxxxxx from:

      http://business.yourdictionary.com/articles/explain-depreciation-accounting.html

       

       

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