Accounting

Marisa Rudolph
Onoriode Emekeme
Chapter4
[pic]Case 4-7
A:  Financial reporting requirements should not affect attentions last making process. Financial reporting shouldnt propose any tell of stance towards business decisions. Financial reporting should designate scotch activity accurately without attempting to influence a decision in a particular direction. According to SFAC No. 5, financial reports should be reliable, relevant, and not concerned with the effect accounting standards whitethorn catch on a particular party. Information is not reasonable unless it is unbiased.
Employers should not downsize or eliminate post-retirement or up-to-date business benefits due to the wise FASB pronouncements. Employee benefits earned while working should thrust the costs of these benefits accrued during the employment period.  Managements decision should be found on their economical impact, not on how accountants report the economic events.
 
B: Social consequences of the FASB pronouncements regarding post-employment and post-retirement benefits are presumable to come on.  Management may reduce or eliminate benefits to their former employees due to the new FASB requirements. Certainly not an acceptable practice, however it is plausible to occur in the future.



The new requirements can potentially impact management compensation and debt covenant agreements. Documenting the costs of providing these benefits early will likely reduce net income and possibly management bonuses. Reporting the liabilities early, may negatively affect the D/E ratio and may violate existing debt covenant agreements.
 
C: Critical post proponents of the new requirements will feel that the social costs would outbalance the benefits.
D: Mainstream accounting proponents believe that the role of accounting is to accurately document a companys education in an unbiased manner.  The information presented should be reported in a manner which represents the current economic climate/conditions, and not be...If you want to get a full essay, order it on our website: Ordercustompaper.com



If you want to get a full essay, wisit our page: write my paper