ADVACED FINANCIAL ACCOUNTING

Q. “What was the primary cause of the current financial crisis? Sub-prime mortgages, credit default swaps, or excessive debt? None of those”, says Steve Forbes, chairman of Forbes Media and sometime political candidate. In his view, mark-to-market accounting was “the principal reason” that the U.S. financial system melted down in 2008.

Do accounting rules actually pack such a wallop? For readers not schooled in financial jargon, marking to market is the practice of revaluing an asset quarterly according to the price it would fetch if sold on the open market, regardless of what was actually paid for it. Because the practice allows for no outdated or wishful-thinking valuations, it is a key component of what is known as fair value accounting. And it is at the centre of the hottest accounting debate in decades.

Many bankers pilloried fair value accounting when the sudden seize-up of credit markets in the fall of 2008 drove the clearing prices for key assets held by their institutions to unprecedented lows. Economist Brian Wesbury represented the views of that group when he declared, “Mark-to-market accounting rules have turned a large problem into a humongous one. A vast majority of mortgages, corporate bonds, and structured debts are still performing. But because the market is frozen, the prices of these assets have fallen below their true value.””  Pozen (2009, p 85)

Reference:

POZEN, R. C. (2009) Is It Fair to Blame Fair Value Accounting for the Financial Crisis? Harvard Business Review, 87, 84-92.

REQUIRED:

A.    “Measurements by using fair value accounting have played an instrumental role in the creation of global financial crisis. Therefore, we should abandon the use of fair value accounting as a measurement tool.”

Critically evaluate the above statement, by addressingstrengths and limitations of fair value accounting through the analysis of literature.

B.     Identify two companies listed on Australian Securities Exchange (ASX).

a.       Analyze the use of fair value measurement in their 2010-2011 financial year reports

b.      Analyze the use of other alternative measurement methods in their reports

C.     Based on your response to questions A and B, discuss the future development of fair value measurement in financial reporting.

D.    Marking guide

Submission Requirements:-

A)    Harvard style referencing

B)    2500 words

C)    Plagiarism- 20% 

Assignment 1: Discussion Questions—Culture and International Trade

Culture and politics are important parts of the external environmental and vary more across than within countries. These features should be carefully assessed before entering into a foreign market or location with a business venture.

Research the impact of culture and politics on business using your textbook, University online library resources, and the Internet. Respond to the following:

• Why is understanding culture critical for successful international business? Give examples of how understanding culture has been important for an international business.
• Classify and describe at least four different types of political systems that an international business might encounter. What type of political system might have the greatest potential for imposing adverse political risk on an international business? Compare at least one other system to the one you selected and explain why it has less potential for imposing political risk.

Write your response in 400 words or less. Apply current APA standards for writing style to your work. All written assignments and responses should follow APA rules for attributing sources.

By Tuesday, February 5 , 2013, submit your assignment 

Assignment 2: Case Analysis—Nike and International Labor Practices

There are certain important differences between developed and developing countries, some of which may lead to difficult ethical problems. The case study in this assignment describes Nike’s production strategy that lead to a labor controversy.

Read the following case study:

• Spar, D., & Burns, J. (2000, January 19; revised 2002, September 6). Hitting the wall: Nike and international labor practices. Harvard Business School. HBS Number: 9-700-047

Analyze the case. In your case analysis, address the following:

1. Summarize the basic issues presented in the case.
2. Describe Nike’s business strategy and how it involved controversial manufacturing relations. Discuss the opinions about this strategy.
3. Describe and discuss the conditions in the manufacturing operations for Nike products. Comment on whether the wages in these manufacturing plants were too low. Cite data in support.
4. What other U.S. companies are mentioned in the case? Describe them and their relationship to the labor issues. Does this issue seem to concern only Nike?
5. In your opinion, did Nike take the right steps? Should they and other U.S. shoe manufacturers continue to contract for making shoes in Asia? Should the U.S. government be involved in regulating such operations?

Submit your work in a 4-page Word document. Apply current APA standards for writing style to your work. All written assignments and responses should follow APA rules for attributing sources.

By Saturday, February 9, 2013, deliver your assignment

Abe Forrester and three of his friends from college have interested a group of venture capitalists in backing their business idea. The proposed operation would consist of a series of retail outlets to distribute and service a full line of vacuum cleaners and accessories. These stores would be located in Dallas, Houston, and San Antonio. To finance the new venture two plans have been proposed:
• Plan A is an all-common-equity structure in which $2.4 million dollars would be raised be selling 80,000 shares of common stock.
• Plan B would involve issuing $1.2 million dollars in long-term bonds with an effective interest rate of 11.9% plus $1.4 million would be raised by selling 40,000 shares of common stock. The debt funds raised under Plan B have no fixed maturity date, in that this amount of financial leverage is considered a permanent part of the firm’s capital structure.
Abe and his partners plan to use a 35% tax rate in their analysis, and they have hired you on a consulting basis to do the following:
a. Find the EBIT indifference level associated with the two financing plans.
b. Prepare a pro forma income statement for the EBIT level solved for in Part a. that shows that EPS will be the same regardless whether Plan A or B is chosen.

Students, please view the “Submit a Clickable Rubric Assignment” in the Student Center.
Instructors, training on how to grade is within the Instructor Center.

Assignment 1.2: Industrialization After the Civil War Final Paper
Due Week 5 and worth 120 points

After the Civil War, the United States became a much more industrialized society. Between 1865 and 1920, industrialization improved American life in many ways. However, industrialization also created problems for American society. Consider events that took place after the Civil War and discuss ways that industrialization affected the U.S. between 1865 and 1920.

You have already developed a thesis statement and developed an outline in which you identify three main points relevant to your topic. Now you will develop the final paper in which you explore your main points in detail.

Write a three to five (3-5) page paper in which you:

1. Introduce your paper with your previously crafted thesis statement.
2. Identify three (3) major aspects of industrialization between 1865 and 1920 that influenced U.S. society, economy, and politics. Consider issues such as geography, entrepreneurship, legislative representation, etc. Explain your responses with specific examples and details.
3. Identify three (3) specific groups that were affected by industrialization and provide two examples for each group describing how the group was affected. (Consider issues such as race, ethnicity, gender, child labor, etc.)
4. Summarize how industrialization affected the life of the average working American during this period. Use specific examples and details.
5. Use at least three (3) academic references besides or in addition to the textbook. Note: Wikipedia and other Websites do not qualify as academic resources.

Your assignment must follow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA style or school-specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date.The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

• Identify and discuss the different ways that the heritage of slavery, the Civil War, the Reconstruction, and segregation have shaped America’s history.
• Summarize and discuss the ways that formal policies of government have influenced the direction of historical and social development in the United States.
• Recognize the major turning points in American history since the Civil War.
• Use technology and information resources to research issues in contemporary U.S. history.
• Write clearly and concisely about contemporary U.S. history using proper writing mechanics.

Click here to view the grading rubric.