Federation Business School BUACC2603: Corporate Accounting Semester 2-2019 ASSIGNMENT Assignment submission Due date: Week 10, 22/09 at 11.55pm in Turnitin This assignment is to be completed in groups...

CORPORATE ACCOUNTING
CORPORATE ACCOUNTING        9
FROM:
DATE:
SUBJECT: CORPORATE ACCOUNTING
TABLE OF CONTENT
    SR. NO.
    PARTICULARS
    PAGE NO.
    1.
    Executive summary
    3
    2.
    Introduction
    3
    3.
    Advantages and disadvantages of preparation of consolidated financial statement
    4-5
    4.
    Nature of creative accounting with examples
    6-7
    5.
    Nature of fair value accounting and its advantages and disadvantages
    7-8
    6.
    Advantages and disadvantages of Conservatism in financial accounting
    9
    7.
    Nature of financial roguery
    10
    8.
    Conclusion
    11
    9.
    References
    12
Executive Summary:
This report has been prepared to analyze and provide detailed discussions on the various concepts of the corporate accounting. Corporate accounting deals with the various processes such as preparation of the financial statement, cash flow statement and many other statements which are useful for the company. The detailed analysis has been provided regarding the usefulness of the consolidated financial statement in the company. It can be used to deal with the complex corporate process such as amalgamation, consolidation and absorption. It also discusses the importance of the creative accounting. The detailed analysis including advantage and disadvantages has also been made regarding the various principles in the corporate accounting such as conservatism. In this analysis detailed discussion were also made regarding the fair value accounting.
Introduction:
Corporate accounting is generally suited for the companies. This type of accounting is performed in order to ensure that the financial activities of the entity comply with the laws and regulation applicable to the organization. The corporate accounting is performed in the organization to report the assets and liabilities of the company to various users of the financial statement of the entity. It can be used to deal with the complex corporate process such as amalgamation, consolidation and absorption. Corporate accounting deals with the various processes such as preparation of the financial statement, cash flow statement and many other statements which are useful for the company.
1) Advantages and disadvantages of preparation of consolidated financial statement:
According to the GAAP holding entity should prepare consolidated financial statement to report on the financial performance of both the holding entity and its subsidiary. Thus analysis of the importance of the consolidated financial statement describes that such statement provide various benefits to users such as investors and other users who are interested in the well being and performance of the company. In other words the consolidated financial statements are prepared by the holding entity having one or more subsidiary. In this subsidiary entity prepares its own financial statement such as balance sheet, income statement and cash flow statement and then they are combined to prepare consolidated financial report.
There are various merits of the preparation of the consolidated financial statement such as this statement allows the various users of the statement such as investors, owners and other users to get a complete detail of the holding entity. It also provides overall financial condition of the company and the impact of the subsidiary on the holding entity. Another advantage of consolidated statement is that due to this there is less paperwork involved. For example if any parent company is having more subsidiary then there are many standalone financial statement to be reviewed and it becomes very difficult to track down the details and records and will become very hard to determine the health and financial performance of the business. On the other hand consolidated financial statement reduces such bulk reports and makes it easier to analyze the statement. This will result in less paperwork and less effort to understand the financial condition of the parent company. Further the consolidated statement decreases the transactions which occur in between the holding entity and its subsidiary and the elimination of such transaction will simply the formulation and analysis of the financial profitability and performance of the company. In addition to this with the evolving time consolidated financial statement will evolve to make the process of the evaluation of the parent company more transparent. Thus with the change in time the consolidated statement aims at making the use of the statement more transparent and reliable for the users of the financial statement. Thus internal management and eternal investors and other stakeholders realize the importance of the consolidated financial statements as they serve as their decision making tool.
On the other hand there are various details which get lost during the consolidation process which can result in the misrepresentation of the fact and inco
ect decision making. Under the generally accepted accounting principles activity between the companies disappears. Any inter-company sales would be deleted as the related cost of goods sold on the income statement of the subsidiary company (Mohr, Angie.2019). Thus this statement can give the users of the statement misstatement regarding the profitability and financial stability in the absence of the non-disclosure of proper information. Further when the...