Client Understanding

Client Understanding Paper
Acc 541
October 25, 2010


Client Understanding Paper

Dear Client,
You countenance requested information why we are requesting information on the following topics: Adjusting turn down cost of market descent on valuation, capitalizing filled on building construction, recording gain or loss on addition disposal and adjusting goodwill for impairment. (University of Phoenix, 2010) downstairs is a summary of each topic.
Topic 1) To ensure the worthy matching of expenses and revenues list cost adjustments are required by accounting standards. Other aspects, such as usage, obsolescence, damage and deterioration, which occurs with inventory during an accounting period, also needs to be put down. Incorrectly describe inventory taxs at higher or lower levels is an illegal act which includes harsh penalties under Sarbanes Oxley Act of 2002. Inflating or deflating the value of inventory on hand to increase or decrease the value of the organization on financial statements to mold investors or lower taxable amounts constitutes fraud. Recording inventory priced at $15 with a true value of $7 is a punishable event.
Expected sales prices less selling expenses compeer the net realizable value, inventory should never be recorded higher than this rate.



An example is Phoenix, AZ recently suffered severe storms in which many vehicles on car dealers haemorrhoid were damaged by hail. Let us assume the dealers purchased the vehicles at $25,000 a piece. The damaged vehicles can at a time only be sold at $23,000 each. The value of each car is now recorded at the new $23,000 price. This decrease in value is documented by recording a loss on the inventory in a write-down account, an expense account, and crediting the inventory account.
Topic 2) Capitalizing interest on building construction: Is the interest added to the principal loan of a self-constructed long term asset instead of being expensed on the current periods income statement. If an organization...If you want to get a full essay, order it on our website: Ordercustompaper.com



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