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Case Study on Accounting Principles in the UK

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Epstein & Jermakowicz (2008) write that international financial Reporting Standards (IFRS) is a designed global communication accounting language that companies use to explain and quantify their accou ... nts. One of the assets that companies have to list on its balance sheet is the identifiable intangibles (Wyatt et al, 2008). The information on them helps the users understand the number of assets a company has that are not visible and are also intangibles. The advantages of it to the preparers include the fact that there is only one language used in preparing the report therefore it is easy to prepare. Arkblad & Milberg (2006) write that the system allows for comparability over all the financial markets. Prepares the report use similar principles give Investors better information for decision-making. Companies will have more flexibility in applying accounting principles. Some of the disadvantages to preparers of the identifiable, quantifiable assets include the requirement to follow the company’s financial status for years. Some companies do not disclose all their unidentifiable quantifiable assets. The report they give has no practical relevance to the parent company too. Many companies cannot identify some of the companies intangible assets gives the preparer’s inadequate knowledge base when preparing the report. Accounting for intangible assets produced by a company is not easy too. That is because companies purchase the assets and start reproducing them, which makes it hard for the preparers to track the rate at which the company is reproducing the intangible assets (CFA, 2013). [Show More]

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