{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ACCT2542 - (a Would the MCS be a useful addition to the...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
(a) Would the MCS be a useful addition to the suite of financial statements already available to users of financial statements? Why or why not? (2 marks) In the Bloom article an implementation of the MCS was conducted on several companies and showed that it was simple, inexpensive to produce and also provided useful information of goodwill to users of financial statements. Since the MCS itself focuses attention on the value of goodwill, there are a number of advantages. Firstly, the MCS maintains the balance sheet in its traditional form, enabling it to only reflect the book value of net tangible assets unambiguously. This is done by moving the goodwill and identifiable intangible assets (IIA) to MCS. Therefore, the MCS reflects the importance of goodwill, IIA and net tangible assets as constituents of market capitalisation which can be directly compared. Secondly, removing the concept of amortization of goodwill and therefore having no impact on the profit and loss statement. Also removes the calculation of impairment of goodwill
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern