Toy Central-Accounting Issues Essay Example | Topics and Well Written Essays - 1000 words

Toy Central-Accounting Issues - Essay causeThe researcher states that the presentation of financial statements should disclose transactions for related parties, accounting policies of the organization, and conflicts of interest between troy weight Central Corporation and the transacting parties. The periodic financial statements need to be reviewed to ascertain adherence and enable the indispensable revisions in the organization with respect to corporate requirements. Capitalized cost or licensing fees of Toy Central Corporation should be expensed when incurred considering the fact that assets are used up. Expenses are considered as money flowing out and liabilities are be incurred. The costs are incurred in the process of manufacturing toys, carrying out other attach tos activities that involve the on-going central operations and offering other related services. Amortization of costs over the life of a contract is appropriate, since Toy Central Corporation is an ongoing art. It is only acceptable for a period of non more than sixty months after the commencement of the disdain, the period of investigation of the probability for a upstart business that is being started. With regard to general business rules for expense deductions, it is not allowable to deduct the expenses of a vernal company, since expenses are assumed to be incurred prior the companys birth. It is outlined that only expenses for a company that has been in operation for a long time open fire be deducted. It is however appropriate to amortise the capitalization costs of a new company if start up expenditure results in an functional entity and the equal installments deductions are started within first month of the business (Stickney, Weil, Schipper and Francis, 2009, p. 426-430) This process enables new companies to deduct the business investigation creation costs and the costs incurred in creating and starting up the business. It is important to note that the businesses can only ded uct those costs that are deductible by business that existed and those that qualify for election. Expenses incurred in investigating business opportunities are deducted over the period of 60 months and are inclusive of expenses that relate to general and special(prenominal) business situations like marketing, research, and development to determine the viability of the business opportunity. Other costs such as land site identification and selection costs are included in amortizable costs. Amortizable costs of developing a new business may include costs such as advertising costs, consultancy fees, licensing fees and salaries. Costs that do not qualify for amortization include incorporation costs start up costs for interests, experimental costs and property acquisition costs subject to depreciation (Carmichael and Graham, 2010, p.126). Delgo Movies accounting issues arise from Hollywood accounting, which is rather conflicting with the generally accepted accounting principles. Delgo Movies use Hollywood accounting to budget and keep records of film outturn financial gains. The issue of concern in Hollywood accounting is that expenditures of film production are practically inflated to significantly reduce profits of the productions to decrease the burden of profit sharing agreements with respect