Inter Company Analysis

Case A One of the underlying assumptions for monetarys statements prep ard using the broadly speaking accepted accounting policies (GAAP) is the going-concern assumption. Under the going-concern assumption, the enterprise will anticipate in operation for a reasonable future finis (will not liquidate). This means that the business will continue in operation long enough to recover its assets and repay its enceinte liabilities. The going-concern assumption provides a conceptual basis for many of the step methods used in accounting. Managers are required to prise the tycoon of the political party to continue as a going concern. This the national of Miller archeological site limited, the management has assessed that the come with is perhaps headed for financial distress and its going concern might be a concern. The routine of the note is to inform the users of the financial distress that the bon ton can face. The company has current liabilities greater than its current assets at the end of the fiscal year. If the company is unsuccessful in negotiations with creditors and investors, and they are unable to make their dues, then the company will no longer be able to continue its operations. The creditors have the ratified right over any assets of the company, as stated in the loan terms.

They can seize these assets to recover parts of their dues. Hence, the company can be forced to liquidate at the superior of the creditors. If negotiations are not successful then the going-concern of Miller Mining Limited will no longer be sound and the financial statements cannot be prepared of the continuity assumption. All of the companys assets and liabilities have to be valued and classified base on immediate liquidation (net realizable values). Case B The purpose of this disclosure note is to identify the operating segment of Riconda Limited by geographical region. This note helps financial statement users assess Ricondas operations separately. It should be noted that public companies are... If you loss to get a full essay, order it on our website: Orderessay

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