Asset valuation in Genting Singapore
This approach is based on what the users of the information feel are true and does not have need of reasoning especially when accounting for bonds, equities, commodities, and other quoted investments. Liabilities and financial assets frequently apply this approach due to their reliable estimates and prices. Fair value measurement in such a case seeks to determine current conditions in the market. One advantage of using fair value measurement is that it presents realistic financial statements. Financial statements made from this approach are further accurate compared to using other methods (VanBaren 2017). Companies, therefore, lack the need to sell their assets in such a down market for the fear of a further downward valuation for that asset. They hold their assets hoping for the stability of the market with time and as a result preserve the actual value of their asset.
Companies, therefore, opt for other choices of measurement basis for their assets and liabilities. Genting Singapore Genting Singapore is one of the companies listed in the Singapore securities exchange board. The company performs activities such as hospitality, regional leisure, integrated resorts, casino operations, investments marketing support services, and hospitality (Handerson 2016). In this approach, the historical cost of an asset is used as the main cost in the balance sheet. It is the original cost that the company paid for the asset (Harvey 2012). However, historical cost convention has an exemption for marketable securities that are recorded with their market value. After holding an asset for several years, the historical cost has no relationship at all with the market value. Plant, property and equipment, and financial assets are the main categories of assets in Genting Singapore Company.
Their level of maturity is the determining factor of their categorization, which is twelve months, is classified as noncurrent after the reporting date (Horngren 2012). Identification of measurement basis Entry value Identification of measurement basis is categorized into various values such as the entry value which is further divided into the following as elaborated below. Historical cost is the initial cost of an asset used to recording accounting records. Historical cost as a measurement instrument may worsen things during crisis (Laux and Leuz 2009). This concept is based on the principle of the cost that requires one to record the value of any asset, equity or liability with its original value. However, there are other negative effects such as obsolesce, spoilage or damage of an asset.
The need for net realizable value is to prevent the business from carrying forward unrealized losses. Fair value is the use of current market value as recognition of assets and liabilities. Concepts used to define the fair value of an asset include current market conditions, intent, orderly transaction, and third party. Instead of a past transaction, the fair value is based on the condition of the market at that particular date. If used for such assets, the approach may result in misleading in loss and gain of an asset, especially in the short term. However, other approaches such as historical cost convention are used to estimate the worth of an asset instead. The reason behind the weakness of using fair value measurement is that it takes the current value of an asset (Tsamis and Laipis 2014).
Common fluctuations from time to time in a year results in varying values of the same property. However, the approach presents the most accurate statements assets that suit this category. These assets are evaluated through annual testing for impairment since they do not subject to amortization (Christensen and Nikolaev 2008). The difference of the recoverable amount of an asset and its carrying amount is the loss impairment of that asset. These assets are grouped at the lowest level for the sake of identifying them from cash generating units. Possible reversals for other non-financial assets reported on the date of impairment also are also used to evaluate losses. Issues associated with non-financial assets of a company include political stability, infrastructure, repatriation restriction, national business law, environmental law, employment law, and other legal issues, cost, and availability of labor among other issues.
However, these categories of assets include quoted debt and non-trading equity investment securities. Methods used for each category of assets in Genting Singapore Genting Singapore uses different methods for categorizing assets such as historical cost convention to value their plant, equipment and property category of assets. The method is reliable for accounting information by maintaining the objectivity of this information (Akwu et al. This method protects the data from manipulation. Since business transactions are recorded under the objective basis. In case of an increase in market price of an asset, the change of that price is recorded and then compared to its original price. This helps the company to determine the profit or loss incurred through the sale of an asset.
Liabilities are also recorded at their current value. The method considers changes occurring in the price of these liabilities and assets and influencing factors of change (Marivate 2014). Through this record, a company determines the best time to sell their assets since they are aware of the fluctuations in the value of these assets and the effects of fluctuations on the value (Rosh 2014). Measures used to determine if an associated cost is an intangible cost include, the use of the software, availability of the software, among other factors. Genting Singapore does not subject its non-financial assets such as goodwill to amortization. Goodwill does not financially impair loss but subjects to certain factors that control its entities and associates (Massoud and Raiborn 2003). The company uses these factors to define amortization of its goodwill.
However, protecting the company from financial risk associated with non-financial assets is equally important. Non-financial assets include trademarks and brand. They are affected by factors such as political instability and law hence evaluated through annual testing. References Albert, A. S. , & Blandón, J. Fair value accounting and the management of the firm. Critical Perspectives on Accounting, 14(4), 383-415. Cairns, D. , Massoudi, D. , Taplin, R. Accounting in Europe, 3(1), 5-22. Chen, H. , Sheng, X. , Goh, T. J. Journal of accounting research, 46(5), 1085-1142. Debate. ” University of Chicago: Initiative on Global Markets, Working Paper No. 33, [online], http://ssrn. com/abstract=1392645. Asia-Pacific Journal of Innovation in Hospitality and Tourism, 5(2), 191-208. Horngren, C. , Harrison, W. , Oliver, S. , Best, P. Journal of Accounting and Public Policy, 22(1), 19-42. Laux, C.
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