ACCOUNTING AND DECISION MAKING ASSIGNMENT

Accounting and Decision Making assignment

Accounting and Decision Making Techniques

International Accounting Standards Board has been designed to ensure that the organizations record their financial records, transactions and perform the book keeping activities according to the standards designed so that they are able to ensure that the financial statement prepared is true and accurate. The International Accounting Standard Boards are able to provide a unified method of financial reporting for all the organizations so that they are able to provide a comparative analysis to all the organizations running their operations in the world. There are five key elements that need to be analyzed in order to ensure that the financial statements represent a fair and true picture of the organization. These elements include items from the Balance Sheet and from the Income Statement of the organization. There are three elements from the Balance Sheet which are assets, liabilities and equities of the organization. Apart from these three items there are two elements from the income statement that is income and expenses of the organization.

Therefore the key four areas that need to be further enhanced so that they can ensure that the financial statements of DITW are accurate and transparent. Although the firm has reported its financial statements according to the International Accounting Standards Board (IASB) that is to include the assets of the firm under the areas of current and non-current assets. But the financial statements of DITW does not fulfil the obligation of for example IAS 17 which is to state the true recognition of the assets owned by the organization. The IAS 17 states that the firms should identify whether the assets are on leases or are owned by the organization. This issue can question the true and fair position of the financial statements of the organization. According to IAS 17 the recognition of the assets either on lease or bought by the firm fulfils the requirements of IASB by presenting the accounting information faithfully.

The second key area that DITW needs to state or present properly is the liabilities section of the financial statement. The liabilities section of the financial statement shows the amount of economic benefits enjoyed by the organization after fulfilling their financial obligations in the past. The liabilities section in the financial statements is shown under the current and non-current liabilities of the organization. First thing that the liabilities section in the DITW balance sheet only shows the amount of current liabilities owed by the organization but it does not represent the non-current liability section of the organization. Second thing important for DITW to disclose is the recognition of the nature of the obligation that the firm has to pay. DITW does not provide a detail presentation of the nature of the obligation for example IAS 37 states that the liabilities are provision, contingent assets or contingent liabilities. Therefore it is important for the organization to completely identify and recognize the non-current liabilities so that they are identified at the present value ...