If the US transitioned from separate accounting rules for book and tax purposes to one set of rules for both, which set of rules might be selected and why? How might the pending transition from US GAAP to IFRS impact your decision, if at all?© BrainMass Inc. brainmass.com October 25, 2018, 5:36 am ad1c9bdddf
If the US transitioned from separate accounting rules for book and tax purposes to one set of rules for both, which set of rules might be selected and why?
Trying to mesh the two separate systems of accounting presents a real problem, but if I had to choose, I would prefer book methods to tax. The reason is that the book method attempts to portray the true balance sheet, net earnings and cash flow.
Of course, we realize that financial statements include estimates that aren't always perfect or accurate, but the accounting constraints tend to provide stakeholders with a conservative, objective and consistent view that can be relied upon, year over year:
? Objectivity principle: the company financial statements ...
The 467 word solution explains the reasons for the preference of systems for domestic as well as international companies.
Critically evaluate: Historic cost or alternative measurement base
Historic cost should be replaced by an alternative measurement base in order to make financial statement more useful.
Critically discuss this statement, concluding with whether or not you agree with it.
Consider the following:
Critically discuss the role and relevance of financial accounting information to the principal stakeholders in the business.
Appraise the limitation of financial accounting as a system of reporting business performance
Communicate financial information and concept.
Some description and explanation is needed but you need to develop arguments and discussion.
You are expected to take a critical perspective, for example recognize the limitations of certain measurement bases.
Referred to: Information for Better Markets: Measurement in Financial Reporting (Institute of Chartered Accountants in England and Wales) icaew.com/bettermarketsView Full Posting Details