Financial Accounting 2

Norwich Business School UNIVERSITY OF EAST ANGLIA *** Financial Accounting NBS 2A1Y Student name: Tran forefront Hai Student No: 4529332 Issued date: 13/12/2010 entering deadline: 24/01/2011 Task 1: In order to depute defect in this description, it is needed to deeply understand definition of addition which is one of the main elements of financial statement. It is identified and offered by IASB framework. An plus is a resource controlled by the entity as a result of past events and from which future economic benefits are expect to flow to the entity. (A. Melville; 2009, p. 24) First of all, an item cannot be assumed as a non-current asset unless it is an asset in the first place. To be able to list an item as an asset, it has to meet specifies criteria with discover to IASB definition of asset which are: * It has to be controlled by the entity. * An asset can arise only as the result of a past event. * It is expected to generate future economic benefits for the entity. Regarding to this definition, I will point out defects in the given definition. First, items could be an asset without any requirement to be licitly own by an entity, merely that the item should be controlled by the entity.

In other words, an asset does not catch to owned by company; it just has to be controlled. For example, certain(p) permit items whitethorn be classed as assets. Due to IAS17, it offers defining a lease as an agreement whereby the lessor conveys to the lessee in return for a recompense or series of payment the right to use an asset for any agreed periods of time. (A. Melville; 2009, p. 147) For example, a company legally makes an agreement with a landlord for using land in certain period of time; in return the company have to pay rent fee for the landlord. Second, as IAS1 guidance the substance in which a statement may be presented, it shows that non-current assets take tangible asset (property, plant, equipment) and intangible assets. According to IAS16, tangible... If you want to pass away a full essay, order it on our website: Ordercustompaper.com

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