Management Judgement and Estimates:
I will be looking at revenue in advance, estimated impairments of non-financial assets and depreciation to see the extent of application of management judgment and estimates.
Revenue in advance is seen on the statement of financial position under current and non-current liabilities and includes transportation sales in advance and loyalty programmes (Air New Zealand, 2014). Air (2014) states that revenue from unused tickets is recognised using estimates about timing of recognition based on the terms and conditions and historical trends. The fair value of revenues associated with Air 's loyalty programme is postponed until the member has redeemed their airpoints. NZ IAS 18 (2006c) states that revenue is to
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I will be looking at fair value accounting and depreciation.
Fair value is the market value at which an asset can be sold or bought. Ryan (2008) highlights many criticisms regarding fair value accounting, these include the reported losses being misleading because when markets return to normal the losses will reverse. When a company revaluates assets or liabilities at a time when the market condition is bad, the value of the assets and liabilities begin to 'swing '. However, once the market stabilises, assets and liabilities will be revalued at their original levels. This makes reports of gains and losses temporary which can be misleading to potential investors (Penman, 2007). Fair values being unreliable as they are difficult to estimate especially if the market is illiquid. And reported losses producing further losses which increases the overall risk of the financial system. For example, if the current market price for an asset drops and thus revaluing the asset downward, people might begin buying this asset at even more lower prices (Benston,
In order to review the historical health of the firm I will calculate different ratios and gross margins and would try to see the trend. I will use Gordon Growth Model to find out the sustainable growth rate for the firm using historical data and then would compare it with its actual growth rate.
The answers of many questions that trouble us can be found by doing first hand investigations. In science, first hand investigations allow scientists to discover new things and explain old things. Through these, they are able to form hypothesises, models, experiments, theories and even laws.
The article Best Idea: Eyes Wide Open by Richard Powers discusses different aspects of the scientific method. It begins by talking about a man named Abu Ali al-Hasan Ibn al-Haytham who made discoveries regarding vision. He did this by simply performing observations and having people stare directly at the sun. Ibn al-Haytham changed the way science was viewed by telling people to simply look in order to gain information. Later, William of Ockham came up with the idea that “when you have multiple ways to explain something, go with the one that has the least amount of assumptions” (Powers, 1999, p. 4). My interpretation of this is that you shouldn’t make something harder than it needs to be. Do not assume, but rather work with the observations and experiments that you have performed. This idea eventually became known as Ockham’s Razor. Rene Descartes went in a different direction and believed that all science can be demonstrated by a series of deductions and self-evident facts, instead of something that is run through observation and experimentation.
The first step of this scientific method is to ask yourself the question of what it is you want to know. This would be, “What is the fastest way to cool a 6 packs of beer?” The second step of scientific method is background research. Adam tells us that he found this myth on the discovery channel, where it stated that in Vietnam people would bury a 6 pack in sand, pour gasoline on top, and set fire to it,
Scientists make progress by using the scientific method, a process of checking conclusions against nature. After observing something, a scientist tries to explain what has been seen. The explanation is called a hypothesis. There is always at least one alternative hypothesis. A part of nature is tested in a "controlled experiment" to see if the explanation matches reality. A controlled experiment is one in which all treatments are identical except that some are exposed to the hypothetical cause and some are not.
Scientific theory by definition seeks to explain observed phenomena by stating the causal reasons that led to the event. The central component of the theory must adhere to the principles of
However, a hypothesis cannot function without its independent and dependent variables. They are both parts of an experiment that are in place to be measured and experimented with. Many variables exist, fo...
In the area of Natural Sciences, new advances in the field are proposed by theorized conclusions before the theory is ever tested or proved. So in order for the different fields to move past the accepted knowledge to become more
I will determine whether the business is effective in operation, as business currently exists, or if there is a need to make changes to the business entity.
The first step in the solution of any problem, whether practical or theoretical, starts with the identification and statement of the research problem.
Research involves inductive and deductive methods (Babbie, 1998). Inductive methods analyse the observed phenomenon and identify the general principles, structures, or processes underlying the phenomenon observed; deductive methods verify the hypothesized principles through observations. The purposes are different: one is to develop explanations, and the other is to test the validity of the explanations (Ary, D 2010)
problem, formation of hypothesis, data collections by observing and experimenting. At all stages of the
The business always develops due to investments and the correct most accurate analysis is an integral part of any initiative. Any initiative should be studied by financial analysts, correctly predicted in terms of financial investments and beneficiaries, tracked at various times, studied , changed on time, if necessary. Success of investments depends From financial analysis, it helps to protect the business from financial losses and predict cash flow and return of investment.
A scientific theory is an explanation that is well- substantiated explanation in regards to some aspect of the natural world that is attained through scientific method and is tested numerous times and usually confirmed through vigorous observation and experimentation. The term theory can be seen as a collection of laws which allow you to show some kind of phenomenon. The strength of a scientific theory associated with the diversity of phenomena can explain its elegance and simplicity. However when new evidence is gathered a scientific theory can be changed or even rejected if it does not fit the new findings, in such cases a more accurate theory is formed. Scientific theories are used to gain further
Prospective investors make use of financial statements to assess the viability of investing in a business. Financial analyses are often used by investors and is prepared by professionals (financial analysts), thus providing them with the basis in making investment decisions.