Loss Contingencies
Common loss contingencies:
Litigation, claims, and assessments.
Guarantee and warranty costs.
Premiums and coupons.
Environmental liabilities.
IFRS
Provision:aliabilityofuncertaintimingoramount.
Liability:
o presentobligationasaresult
US GAAP
Contingencies
An existing condition, situation, or set of
circumstances involving uncertainty as to
possible gain (gain contingency) or loss (loss
contingency) to an enterprise that will
ultimately be resolved when one or more future
events occur
PROVISIONS AND CONTINGENCIES
SIMILARITIES
2. Recognizing provisions for costs associated with future
operating activities is prohibited.
3. Require disclosures related to contingent liabilities that are
not recognized, but that have a likelihood of occur
Case 6.5: Avis Love, Staff Accountant
This case is about a staff accountant named Avis Love who has developed close friendship with client
personnel. Such friendships could prove to be problematic to auditors. In this case, she found out that
the store ma
Case Avis
Answer:
1. It would have been inappropriate for Avis to substitute another store for Store 51 after she discovered
the cutoff errors in that stores account records because that would be covering up information that she
found was incorrect. If Av
Accountant
Answer
5. I would have recommended that Avis or her colleagues use auditors judgment to determine the
materiality of the cutoff errors instead of using other methods such as the percentage of total revenue
method. Since the cutoff errors were c
Case Avis
Question 3
Parties that could be potentially effected:
a. Mo: Avis had no obligation to Mo whatsoever, Avis had an obligation to the public and to representing
all financial statements and evidence found truthfully. Though Avis liked Mo, Mo work
PROVISIONS AND CONTINGENCIES
SIMILARITIES
1. require an entity to recognize a loss if:
A present obligation exists as a result of a past
event.
It is probable that a loss will occur.
A reliable estimate of the obligation can be made.
A present obligat
Case 6.5: Avis Love, Staff Accountant
Key facts:
1. Avis Love, a staff accountant for one of the major accounting firms, was assigned to the annual audit
of Lowell, Inc., which operated a chain of retail sporting goods stores in the South.
2. While perfor
12/17/2012
MATHEMATICAL APPLICATIONS
FOR BUSINESS (MTH171)
Lecture 1
Applying Calculus in Business & Economics 1
1
Objectives
Understand rates of changes and the process
of differentiation.
Be able to use differentiation process to
determine turning poi
11/12/2012
MATHEMATICAL APPLICATIONS
FOR BUSINESS (MTH171)
Lecture 9
Introduction to Linear Programming
1
LEARNING OBJECTIVES
Identify Linear Programming (LP) problems
Understand the basic assumptions and properties
of Linear Programming
Formulate Line
11/12/2012
MATHEMATICAL APPLICATIONS
FOR BUSINESS (MTH171)
Lecture 10
Introduction to Linear Programming with
Excel Solver
1
Review Lecture 9
What are Linear Programming (LP) problems?
What are the properties of LP problems?
How to formulate LP problem
11/12/2012
MATHEMATICAL APPLICATIONS
FOR BUSINESS (MTH171)
Lecture 8
Introduction to Inventory Control Models
1
LEARNING OBJECTIVES
Understand the importance of inventory control and its
decisions
Use Economic Order Quantity (EOQ) to determine how
much
1/14/2013
MATHEMATICAL APPLICATIONS
FOR BUSINESS (MTH171)
Lecture 7
Annuities and other Financial Instruments
1
Objectives
Understand annuities and be able to compute
the present value of an annuity.
Understand mortgages and other payments by
installmen
10/26/2012
Mathematical Applications For
Business (MTH171)
Lecture 6
Regular Payments
1
Objectives
Recognize and evaluate a geometric
progression:
Geometric progression vs. arithmetic progression
Geometric ratio and geometric series
Calculate the tota
10/23/2012
Mathematical Applications For
Business
Lecture 4
Present Values and Depreciation
1
Contents
Discounting process and Present Values
Depreciation methods:
Linear Depreciation
Reducing Balance Depreciation
2
Discounting and Present Value
$100
10/26/2012
Mathematical Applications For
Business (MTH171)
Lecture 5
Investment Appraisal
1
Contents
Investment and Investment Appraisal
Non-discounting techniques:
Payback period (PBP)
Average rate of return (APR)
Discounting techniques:
Net presen
12/18/2012
MATHEMATICAL APPLICATIONS
FOR BUSINESS (MTH171)
Lecture 2
Applying Calculus in Business & Economics 2
1
Objectives
Understand the link between marginal
analysis and differentiation process. Be able to
use marginal analysis in economics.
Under
12/18/2012
Mathematical Applications For
Business (MTH171)
Lecture 3
Introduction to Financial Mathematics
1
Objectives
Understand concept of time value of money
Understand differences between simple and
compound interests
Distinguish among different t
LECTURE 2
3
Solving linear programming problems: the Simplex Method
(Chapter 4.1-4.8, 4.11-4.14, 6.2 )
3.1
Standard form of the LP-problem
All main constraints are equations.
All variables are nonnegative.
In general, the standard form of an LP-problem
Optimization Methods
Draft of August 26, 2005
II. Analysis of Linear Programming Solutions
Robert Fourer
Department of Industrial Engineering and Management Sciences Northwestern University Evanston, Illinois 60208-3119, U.S.A. (847) 491-3151
4er@iems.nor
Linear Programming Notes I: Introduction and Problem Formulation
1 Introduction to Operations Research
Economics 172 is a two quarter sequence in Operations Research. Management Science majors are required to take the course. I do not know what Management
Geometric series formula
A geometric series includes n items in which the next item is equal to the previous item
multiplied by a ratio called geometric ratio.
The sum of n items is:
(1)
(2)
()
()
(
)
Formulae for computing PV and FV of an annuity:
If com
1. What is time value of money? What are simple and compound interest? How to calculate
future or present value of an amount of money if either simple or compound interest is
applied?
2. $20,000 is invested at 10%. What would be the future amount after 20
1.
With the demand function: P = 200 3Q, what is the price
elasticity of demand when the price is 10?
Is demand elastic, inelastic, or unit elastic to price in the above
case?
2.
This graph is for the following questions.
a) What is the value of the slope
Problem 1: A manager wishes to purchase seats for a new cinema. He wishes to buy three types
of seat: standard, deluxe and majestic. He decides that the total number of deluxe and majestic
seats should be at most half of the number of standard seats. The