d Adjustment of rectifying accounts of assets not correctly recognized The

D adjustment of rectifying accounts of assets not

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d) Adjustment of rectifying accounts of assets not correctly recognized The adjustment should use a realistic rate even to signal to the market how long Sutter Health expects to use the asset, the possibility of its recovery, as well as when its replacement will be required (Kapel AS et al. 2004). The same reasoning could apply to the amortization of future goodwill when Sutter Health considers the benefits to be higher than the ten years established by CVM (Blye, 2014). The adjustment may include the realization of an allowance for doubtful accounts considering the actual credit risk (Souza M, & McCarty, 2007). The exact quantification of various asset-reducing provisions could be assessed by including the requirement for uncovered liabilities, calculated using statistical concepts (Herbst, 2018). e) Rights not recognized due to the restrictions of Conservatism Sutter Health could evidence rights with potential future benefits that are not accounted for due to the limitation of accounting, as in the case of tax credits, mainly arising from tax losses and contingent assets, and a probabilistic calculation should be applied (Herbst, 2018). f) Amounts recognized in profit or loss due to the imposition of current standards This adjustment could include expenses that Sutter Health considers will generate future benefits such as those incurred in the initial phase of Sutter Health with non-deferred research and development, advertising, and training, immediately recognized as an expense (Blye, 2014). For all asset items, a test should be performed to analyze the ability to perform, known internationally as the impairment test; the amounts presented should never outweigh the expected future benefits (Kapel AS et al. 2004).
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SUTTER HEALTH CASE ANALYSIS Bruku6 Accounting practices used by California Sutter Health in defining and solving its collection problems Liabilities Adjustments For the financial statements to be fair, the liabilities must present the approximate amount of the future cash portfolios derived from past transactions or events (Kapel AS et al. 2004). a) Recognition of monetary restatement of non-monetary liabilities and adjustment to present value of prefixed liabilities: The effect of inflation should be recognized on non-monetary liabilities, such as advances from customers that may be underestimated. In companies that assume fixed responsibilities or buy forward from suppliers with fixed values in reaps, the amounts should be discounted considering the projected purchasing power for the effective payment date (Herbst, 2018). b) Adjustment to the market value of liabilities and recognition of changes arising from the use of the US dollar closing rate for Long Term Liabilities: This adjustment can be applied to companies that have issued debentures and other debt instruments that are traded on the secondary market (Purcell & Johnson, 2017). The application must consider Sutter Health's intent and its ability to redeem or purchase with these securities (Herbst, 2018). For companies that have long-term foreign currency debt, when the dollar is
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  • Fall '14
  • Bulliner

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