The purpose of this assignment is to complete the FASB Codification Assignment. Complete Items 1-4.
Item 1
Access the glossary (Master Glossary) to answer the following
- What is a change in accounting estimate?
- How is a change in accounting principle distinguished from a “change in accounting estimate affected by a change in accounting principle?”
Item 2
What guidance does the codification provide concerning the format of accounting disclosures?
Item 3
In light of the full disclosure principle, investors and creditors need to know the balances for assets, liabilities, and equity as well as the accounting policies adopted by management to measure the items reported in the balance sheet.
Instructions: Go to http://aaahq.org/asclogin.cfm to log in and prepare responses to the following. Provide codification references for your responses.
- Identify the literature that addresses the disclosure of accounting policies.
- How are accounting policies defined in the literature?
- What are the three scenarios that would result in detailed disclosure of the accounting methods used?
Item 4
Your client is in the planning phase for a major plant expansion, which will involve the construction of a new warehouse. The assistant controller does not believe that interest cost can be included in the cost of the warehouse because it is a financing expense. Others on the planning team believe that some interest cost can be included in the cost of the warehouse, but no one could identify the specific authoritative guidance for this issue. Your supervisor asks you to research this issue.
Instructions: Go to http://aaahq.org/asclogin.cfm to log in and prepare responses to the following. Provide codification references for your responses.
- Is it permissible to capitalize interest into the cost of assets? Provide authoritative support for your answer.
- Discuss which assets qualify for interest capitalization.
- Is there a limit to the amount of interest that may be capitalized in a period?
- If interest capitalization is allowed, what disclosures are required?
General Requirements
APA style is not required, but solid academic writing?is expected.
This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.
You are required to submit this assignment to LopesWrite. Refer to the LopesWrite Technical Support articles for assistance.
Items 1-4 provided with permission for use in ACC-616 from: Keiso, D. E., Weygandt, J. J., & Warfield, T. D. (2016). Intermediate accounting (16th ed.). Danvers, MA: John Wiley & Sons, Inc.
(Also, I have attached what I have done. It is not complete, but it is a starting point)
Notes from the Professor:
Description
Hello:
I received a really great question on how best to approach the FASB Codification Assignment. This is what I provided–I hope this helps in developing your skills from ‘copy and paste’ to articulating in essay format our responses. Remember, we are not ‘just answering questions’…you demonstrated that skill as undergraduates. Now, we take the readings and synthesize what was written, paraphrase it in our own words, and properly cite our sources.
What I would do, is first, you can have a header for each of the questions/topics. For example, I would have aheader called: Item 1: Accounting Estimates and Accounting Changes.
I would then have a paragaph that covers what a change in accounting estimate is, in your own words with an example (Cite your source though in the paragraph). I would then have another paragraph on describing the differences between an accounting change and an accounting estimate (again, with example and citation). So, you can write a minimum of 2 paragraphs as if you are writing an essay response on these concepts.
The key is can you articulate, through synthesis and paraphrasing the concepts and can you provide examples that demonstrate how the concept may be applied in practice.
When we are covering information on guidance, it is more than just providing the link. Again, provide an essay response as to what concerns are addressed regarding accounting disclosures and provide examples.
