financial accounting

3 level hierarchy recommended by IFRS 13 to evaluate informational inputs into the measurement of fair value.

1 Comment / ACCA P2, financial accounting, IFRS 13 / By

To increase consistency and comparability in fair value measurements and related disclosures, the IFRS 13 establishes a fair value hierarchy  that categorizes into three levels, the input to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active market for identical assets and liability (level 1 input) and … Read the rest

Meaning of the term ‘fair value’ as defined by IFRS 13.

1 Comment / ACCA P2, financial accounting, IFRS 13 / By

Many accounting standards require or permit the use of fair values in measuring assets and liabilities. However, there has not always been consistency between these standards regarding the methods of arriving at fair values. IFRS 13 Fair values was issued on may 2011 as an attempt to remedy this problem. The IFRS aim to define fair value, set out the … Read the rest

Revision question on creative accounting ( NBAA May 2016)

Leave a Comment / ACCA P2, ACCOUNTING REVISION QUESTION, financial accounting / By

Creative  accounting involves presenting income, expenses, assets or liability with the intent to influence readers towards the interpretations desired by the authors. It becomes the financial number game and is systematic misrepresentation of net income or net assets.  this is achieved through the aggressive choice and application of accounting principles, fraudulent financial reporting , earning management or income smoothing
the … Read the rest

Revision question on IAS 10 (NBAA May 2017)

Leave a Comment / ACCA P2, financial accounting, IAS 10 / By

(a) Consider the following list of events that occurred between 31st December 2016(reporting date) and 31st March 2017 (date of authorization of financial statement for issue) and decide which one you would classify as adjusting events and which are non-adjusting events.  You should also state clearly the treatment that you are proposing in each case.
(i) The … Read the rest

6 necessary conditions for recognizing development cost as intangible assets

6 necessary conditions for recognizing development cost as intangible assets.

2 Comments / ACCA P2, financial accounting / By

According to IAS 38 intangible assets, development expenditure are capitalized if the entity can demonstrate the following conditions



  • The technical feasibility of completing the intangible asset so that it will be available for use or for sale
  • Its intention is to complete the intangible asset and use or sell it
  • Its ability to use
… Read the rest

Six (6) advantages that companies can derive from disclosing social and environmental information in annual report.

Leave a Comment / financial accounting / By



Benefits that companies derive from disclosure of social and environmental information in annual reports:

  • Top Management/Board of Directors: top Management needs the disclosure to respond to press criticisms, answer shareholders‟ questions and ensure that company policies are followed. 
  • Board of Directors, because of their growing legal liability, needs to know in some details what social
… Read the rest