Posted: September 13th, 2017

Accounting Theory

Paper, Order, or Assignment Requirements

Assignment question, instructions and marking rubric attached. 3300 – 3500 words. Please use academic journal articles. It is a research essay (introduction, body, conclusion, reference (Harvard) list).

ASSIGNMENT QUESTION:

Preamble:

Fromtimetotime,newtransactionsorvariationsoftransactionsarisethatarenotspecificallycoveredbyexistingaccountingstandardsorforwhichapplicationofanexistingstandardisuncertain.Ifconsideredmaterial,accountingstandardsettersmustconsider howto dealwith the particularissue.

Assumeanewformoffinancinghasarisenthatblursthedistinctionbetweendebtandequityandforwhichapplicationoftheexistingrelevantaccountingstandardisuncertain.Thereappearstobesomevariationinaccounting forthesetransactions,withsomeentitiesrecognisingthesefinancingcontractsasdebt(liabilities),somerecognisingthemasequity,andsomeattemptingtoapportionthefinancinginto underlyingdebtandequitycomponents.Accordingly,theInternationalAccountingStandardsBoard(IASB)hasdecidedthatitshoulddevelopspecificprovisionswithintherelevantaccountingstandardtoprovidemoredefinitiveaccountingregulationofthesenewfinancingcontracts.

Theassignmentquestionrequiresyoutoexplain,fromaregulationandtheoryperspective,howtheIASBwouldapproachthisissueindevelopingthenewprovisions.Inparticular,thiswillrequireyoutoincorporateconsiderationofthefollowingquestionsinto your essay:

• HowwouldtheIASBusescientific(empirical/inductive)andnormative(prescriptive/deductive) theoryapproachesinaddressingtheissue(oranysimilarissue)?
• Howdoesregulatorytheory apply to theissueinrelation to the IASB’s response?
• WhatroledoestheaccountingprofessionhavewithrespecttotheIASB’sresponse?

Readcarefullybeforeattemptingto fulfil the requirements.

REQUIRED:

Writearesearchessayaddressingtheaboveassignmentquestion.Youarerequiredto

fullyexplainyourviewpointsandsupportyourdecisionby referencetorelevantsources.Inparticular,ensureyouincorporateintotheessayconsiderationofthethreequestionsoutlined inthe preamble above.

Notethatthewrittenassignmentdoesnotrequireyoutospecificallydiscusstherelevantaccountingstandardrequirementsrelatingtothetypesoffinancialcontracts,andthedebtversusequityissue,referredtointhequestion. Thefinancing issue(newformoffinancing)ismerelyprovided asanexampleofan issuethat regulation might haveto deal with. Hence, theassignmentparticularlyrequiresyoutofocusonthetheoreticalissuesunderlyinganaccountingstandardsetter’s responseto anynew hypothetical accountingissuethat mayarise.