The Core Competency of the Company Case Study Example | Topics and Well Written Essays - 2500 words

The Core Competency of the Company - Case Study Example Brand strategies define buyer experience-through the products offered, the advertising messages conveyed, indeed through every interaction between an organization and a buyer-and through that experience buyers develop an understanding of brand differences (perceptions), form judgments about the value of brand differences (preferences), and create a logic for choosing among brands (brand choice strategies).We refer to strategies that teach buyers as market-driving strategies (Bearden et al 77). Because of the Japanese consumer's traditional focus on corporate reputations, Japan has been considered a tough market for individual brands. This rising importance of branding, segmentation, and positioning has created new opportunities. In addition to Asahi and Honda, other nimble companies are taking advantage of the changes in the market to identify and capture specific segments of the market. Given the need to balance corporate and product-level branding, Sharp is applying a variety of approaches. These range from the more traditional corporate branding to two-story branding to narrow individual brand positioning. Companies are also using more Sharp -style branding (Boone and Kurtz 72). High technology continues to have an intense attraction for consumers, who recently favored such products as wristwatch PCs flat-screen TVs, and satellite cellular phones. New product development in Japan used to be technology and shelf-driven. In this environment, Japanese firms developed an unparalleled capacity for rapid product innovations, churning out new products and variations at a breathtaking rate (Collis and Noda 5). Japanese companies continue to have tremendous capabilities in rapid product innovation. of new product launches is greater in Japan than in the United States. In other categories, such as household products, the number of new product launches relative to the size of the market is larger in Japan than in the United States. In a few categories, such as foods, Japan lags behind the United States in producing new products (Kotler and Armstrong 92). Core competencies of Sharp are unique approach to products and entrepreneur spirit, innovative and state-of-the-art solution. The choice criteria of Japanese consumers is complex and changing rapidly. The approach to such cross-sectional variability would be niche marketing. United States marketers would find segments of the market in which the company has advantages over rivals and concentrate on those markets. But because Japanese consumers have traditionally been hard to segment and consumer choices have changed quickly-and, in many cases, randomly- Japanese firms instead developed a "rapid fire" approach to marketing to deal with the tremendous variability of their markets (Kotler and Keller 62). 2.In what ways does being a Japanese company contribute to Sharp's success Traditionally, Japanese companies have focused on building large, ambiguous corporate brands, so the "what" of brand positioning has been very difficult to pin down. In a market perceived to be homogeneous, the "whom" of brand positioning has also been very difficult to determine. In effect, the "what" and "whom" of Japanese

Analysis Of Bohemian Rhapsody Music Essay

Analysis Of Bohemian Rhapsody Music Essay Bohemian Rhapsody was recorded by the British rock band queen. Released in October 31, 1975, Bohemian Rhapsody was greeted like a miracle from heaven in the largely barren musical ground of the mid-Seventies. At the time it was produced like most expensive single. Brian May thought of that the tracks main album A night At The Opera as their Sgt Pepper. It was the first time that an opera passage had been combined with a pop record and reached number one place. The song obviously has a very unusual structure and the operatic section was planned to be a lot shorter, but when they got to the studio they decided to make it bigger. The song was recorded at the Roundhouse studios, located in Wales in particular the Rockfield studio 1. Freddie Mercury is the writer of the song also keyboard player and a lead vocalist in the band. He wrote the song in his flat while he was trying to develop a complex song, which would consist of more than three sections. Using a structure that leans towards a more classical approach, which was in contrast to the contemporary-pop form at that time. According to Brian May most of the song was written in a studio environment, but the rest of the band claim that Freddie had everything in his head before that. Interestingly enough the song hasnt got a chorus, but just a complex layer of verses and main parts including a ballad verse, an operatic passage, a heavy rock solo and a classical outro. Queens prowess at layered vocal harmonies, dominated by Mercurys soaring operatics, was second to none, while Brian Mays multitracked guitar orchestrations were arguably the most creative contributions to the instrument since Jimi Hendrix. In the studio the band embraced the innovative breakthroughs laid down during the psychedelic and progressive eras, and took them to another plain. While they relied on but a simple instrumental line-up of Guitar, Bass, Piano and Drums, they played them like they were new inventions and in doing so, delivered a genuinely new, epic slant on rock. Launched into the age of glitter, it was no surprise when Queens flamboyance earned them a glam rocker tag. Although studio technology played a vital part in the stunning results, what must not be overlooked is the natural tone of Mays homemade guitar, his vibrato technique and the use at all times of a silver sixpence in place of a pick. Brians great strength was in phrasing a part and then double-tracking or harmonizing very accurately. The title of the song has a powerful rock ideology the word Bohemian could be traced to the practice of an unorthodox lifestyle. That could be associated with like-minded people having musical and artistic or qualities. A rhapsody can be described as music in a one-movement work that is episodic yet integrated, free-flowing in structure, featuring a range of highly contrasted moods, colour and tonality. A burst of sudden inspiration and a sense of improvisation make it freer in form than a set of variations Bohemian rhapsody was the biggest success in radio and charts for queen. They achieved that with introduction of a video clip to the song that was broadcasted heavily on radio and television. It was strongly influenced by the media hype they created with their experiments previous albums. The public expected to hear such an experimental approach. Queen had a previous attempt in a similar form that was used in the song the The march of the black queen which didnt reach the success of Bohemian Rhapsody.The band wanted to become famous with that kind of song and they achieved it, because of their musical geniuses. They band had some attempts to reach popularity with similar songs in structure and form. But they didnt receive the deserved media attention. Freddie needed to write something like that for a long time. With the high standard of contemporary and classical mix of genres bohemian rhapsody clearly represents the album Night at the opera and still is one of the most epical contemporary albums nowadays. The recording process took three weeks, and the song was changed many times until the final piece was produced. The classical genre of opera has invaded nearly all aspects of popular culture. Especially one essential sphere of popular culture that has remained relatively immune to operatic influence is rock music. Even when hearing the song for first time and you didnt know who are queen, the operatic influence and form in the whole album are clearly distinguishable. They are combined in symbiosis with their progressive and experimental hard-rock genre from their previous albums to create something unique that was never heard before on this scale with that kind of success. The song consists of six sections: introduction, ballad, guitar solo, opera, hard rock, and outro. This format, with abrupt changes in style, tone, and tempo, was unusual to rock music. Intro part (0:00-0:48) The song begins with a cappella multitrack layered vocals. The tonal centre of this part is in B flat, Although the music video shows that the whole band is singing at the beginning, Fredie recorded it by himself. The lyrics are questioning if this is the real life or a fantasy, almost like hes dreaming not really aware of whats going on. And then he goes open your eyes look up to the skies and see. It means to free yourself and realize. When he says Im just a poor boy hes speaking in first person you can feel the tragic character on his voice. The melody of the voice, doesnt fully represent the true tones sung by Freddie FIG 1 Analysis of the first part. Chord functions In the first bar the song begins with a B flat six chord. Then there is a Cmaj7 which alternates with Bflat6. In the third bar theres Fmaj7 and Cm7 emphasizing on a dominant function with the fa in octaves at fifth time, which resolves in B flat alternating with CM7. FIG2 FIG2 , second bar Gm which is the parallel minor of B flat. Bflat, acts as a III mediant and then goes to the other mediant on VI function FIG3 second bar goes to Cm and then to the subdominant IV Fmaj and on forth time modulates to Bmaj (FIG4) the harmony moves chromatically through Bflatmaj and A for the first two bars resolving to Bflatmaj and in the fourth bar eventually goes to IV subdominant Eflatmaj moving through Bflat with a third in the bass. FIG5 First bar diminished C# which acts as a subdominant moves to the dominant with a fifth in the bass Fmaj following a classical cadence that resolves to Bflat on the third bar. The harmony is in arpeggio, with octaves on G and F, which could be interpreted as a sixth chord Bflat6 Ballad (0:49-2:37) FIG6 This part of the song is repeated twice in a verse. Everything is the same except for the lyrics. Second bar goes to the VI mediant Gminor moving through II Cm and stays there until the third time, first bar on figure6 when it goes to the dominant F. The movement, I > VI > II > V can be characterized as a chain of fifths root-motion. The arrangement is quite bare in the first verse. Theres piano and bass played, but no guitars or backing vocals. The introduction of drums is retained until the beginning of the second verse, entering along with the double tracked rhythm guitars. FIG7 Following the verse sequence the same passage Bflat->Gminor FIG8 And heres an interesting alternated cadence which changes the whole structure of the verse with Cm7 that passes through augmented B and reaches stability in the subdominant Eflatmaj-5 that leads to the dominant Fmaj-3bass and the semitone movement in the bass on third time changes the function to minor and the G predisposes to Eflatmaj-> Bflatmaj-3. The similarity between the two parts of the section is easily distinguishable. The first has a more straight-ahead progression, but the second one is a variant. FIG9 C minor -> F minor -> Bflatmaj that act as a dominant to Eflatmaj, The transition of a key shifting doesnt seem that obvious, partially using a modulation that is executed smoothly and its difficult to detect. On the other hand, the tonal center of the part steps along the new key. FIG10 First volta begins with the tonal centre of Eflatmaj which moves to dominant V Bflatmaj and then to the VI mediant Cminor moving through a minor subdominant Amflat. This function suggests of a melodic major scale with flattened VI and VII, which resolves to Eflatmaj. And the same sequence repeated with a Eflat diminished -> Fminor7 to leads the harmony to the second verse in this part with two bars in Bflatmaj. FIG11 Second volta is entirely a guitar solo that leads to the next part of the song. Chord functions: First bar Eflatmaj-> third beat Bflatmaj-3 > second bar Cminor and third bar Fminor. Guitar solo (2:37-3:03) The band builds up intensity that reaches the peak and culmination in this part. (figure) First bar Bflat7 -> second bar Eflatmaj -> third beat Gminor-5, fourth bar is in Cminor, fifth bar in Fminor, sixth bar is moves through Dflatmaj, dflatmaj with c in bass and Bflat minor. Brian recorded his own version of Freddies melody instead copying it. FIG12 The solo is in a mixolydian scale, because the scales from Bflat to Bflat have an A flat alteration a flattened seventh that is necessary for the eflatmaj. The harmony in the last bar of the solo changes chromatically as it the key changes to A, which is is a drastical change. The operatic segment enters immediately as Mays solo abruptly concludes Opera (3:03-4:08) FIG13 The choir effect was created by having May, Mercury, and Taylor sing their vocal parts continually for ten to twelve hours a day. Multi track layered vocals that mimic a wall of sound can be heard throughout this part. According to Roger Taylor they had sufficient vocal qualities to accomplish that. Freddie was good in the middle of the range, Brian had a powerful low voice and Taylor was singing the highest tones. They have used a 24track tape machine to record all these parts in a three weeks period. This part of the song is strongly operatic. It hasnt got a clear measurement and even thou it begins in Amajor with clear chromatic pattern that goes D major, A major, A diminished, and back to A major that is repeated twice and then continues with the subdominant move FIG13 D major, A major, D major, A major, A diminished, A major, D major, A major. On thunderbolts it shifts to Dflatmajor with aflat in the bass, Aflatmajor followed by a Cmajor with fifth in bass and Emajor that suggests a very classical culmination of the phrase rarely used in rock music. Many of the lyrics in this part are phrases of the Quran. The word Scaramouch means A stock character that appears as a boastful coward. FIG14 Fig cannot be characterized with a tonal centre Freddie and Taylor are repeating a chromatic phrase in octaves, which resolves in another wall of layered vocals. The word Galileo was used for Brian May who was interested astronomy and Galileo Galilei was a famous scientist. Magnifico means magnificent in Italian. FIG15 At the second bar and then it returns to the previos pattern of chromatic melody accompanied by rapid changes in harmony as it follows from the third bar Bmaj, Bflatmaj, Amajor, Bflatmaj FIG16 The same chord sequence as in the previous bar is repeated. On the second bar in the chorus section the harmony progression changes to: Aflatmaj, Eflatmaj, Eflat diminished, and goes the back to Eflatmaj, which seems to be the same chord sequence as in used in the beginning of the operatic part, Dmaj, Amaj, Adiminished, Amaj therefore the tonal centre should be Eflatmaj. The whole sequence repeated once again in the third bar. FIG17 Aflatmaj and Eflat in the first bar resolve to Fmaj and Bflatmaj accompanied with the melody. At the third bar theres an intro to the solo part of narrator whos negotiating for his life continues in a chromatic movement: Aflatmaj, Eflatmaj-3, Fsharp diminished and Fminor-7. The absence of minor chords is quite drastic, but not unexpected for acapela passage. FIG18 The first two bars follow the harmonic sequence Bmaj, Bflatmaj, Amaj, Bflat this movement is chromatic in semitones gradually reaching the dominant Bflat and resolves in Eflat at the third bar. Bismillah is one of those words taken from the Quran and it literally means In the name of Allah. In this part clearly the narrator is struggling to save his life, but the judges are not going to let him go. The whole message is repeated once again. FIG19 On the phrase will not let you go theres a strong accent as if its been chopped to impose an authority expression. Also taylor plays on the floor tom in quavers as if hes banging the judges hammer. The lyrical phrase let him go is in Eflatmaj and suggests that someone is also pleading for his innocence. We will not let you go is in Bflat emphasizing on a dominant function. FIG20 The whole harmonic sequence is repeated once again to dramatize the struggle and negotiation, until it reaches another layered wall of vocals. FIG20 In the second bar the harmony changes to Gflat7. On the pharese No no no theres a chord progression Bminor, Amajor, Dmajor, Dflatmajor, Gflatmaj FIG21 , Bflatmaj dominant chord and resolving in Eflatmaj. With the narrator in solo, whos moaning and whining with the phrase mama mia. Bflat on let me go resolving to- FIG22 Eflatmaj, Aflatmaj,and Dmajor, Gminor in the second bar moving towards Bflat on the third and staying on a dominant chord for the next four bars. FIG23 And changing the pulsation to triplets until finally resolving to Eflatmajor Hard rock (4:08-4:55) This part begins with a solo intro performed by May that ends in Fminor. It has a rather aggressive and angry approach compared to the dramatic previous part. FIG24 The harmony on the verse follows the chord sequence: Bflat7, Eflat7-5, Bflatmaj, Eflat Fig25 Bflat in the first bar and then a pause of 2 beats for the voice in Dflat Brian plays on it. The verse sequence repeats, but FIG26 On the phrase die goes to Aflatmaj, Fminor and Bflatmaj on Oh baby and then again Fminor on cant do this to me baby FIG27 Bflatmaj followed by Fminor with a seventh this time. The sequence is repeated twice until reaching FIG28 Eflatmajor in the first bar followed by an instrumental solo, gradually slowing down and decreasing the velocity. Outro (4:55-5:55) The song returns to the pace and form of the intro part. The guitar is playing along with the vocals Ooh ahh. Theres a second guitar melody played as a second voice that was recorded with a different amp. Lyric wise the phrase Nothing really matters appears again from the beginning of the song and is accompanied by an arpegiated piano that is suggesting a resignation and dramatic images with the usage of minor chords. At the very end of the song theres a sound of a big gong that is emphasizing on the completeness of the whole song structure. Roy Thomas Baker recorded the song using just a single microphone on the snare, U67 or U87 on the toms and overheads. An AKG D12 was used on the bass drum. John Taylors bass was recorded via direct input into the desk. They have also recorded the bass with a cabinet to pick up the air movement with Electrovoice 666 and Neuman U67. Freddies piano was miked up using two Neuman U67 in a stereo pair and a shure vocal microphone for his voice. Brian may used Vox AC30 amp (backless) they also set up some microphones behind the amp and near the wall to capture some ambience and the full spectrum of the guitar sound. While the first three albums had been made using a 16-track equipment, Bohemian Rhapsody benefitted from the 24 track technology. Harmonic analysis referenced to a simple score of the piece provided by lecturer.

The Great White Wall Essay -- Australia Immigration Migration Papers

The Great White Wall For most people, someone within their ancestral lineage has immigrated to a new country. Immigration has been perceived as a way to provide and enhance personal opportunities (McConville: p 73). Overpopulation began to be a problem in many of the great empires in the early 19th century, and emigration seemed to provide the best opportunity for people to better themselves in a new world (McConville: p 73). Rather than draining the resources within one society, people were given the opportunity to form a new life and use the resources in another land (McConville: p 73). The Great White Wall Australia became portrayed as a haven from industrial capitalism (McConville: p 73). Many immigrants began to flood into the land where opportunities could be found. However, Australia flourished within a white society, providing only racist ideals to â€Å"rationalize and condone the colonial conquest, cultural domination, racial exclusion and economic inequality† (Evans: p 175). As McQueen put it, â€Å"Racism was the most important single component of Australian nationalism† (McQueen: p 29). Australia built a ‘white wall’ against any non-European immigrant and through racism as well as policy; segregation and sometimes even exclusion of non-whites was sustained. The influx of immigrants from around Europe and surrounding nations began to integrate into Australia and gave rise to a nation of opportunity. In the mid-1800’s the attraction of ‘men of energy’ to produce a stable working force for the economy became the basis for many policies set up to help integrate immigrants into the country (McConville: p 74). Immigration assistance became established primarily for agricultural workers and single women (McConvi... ..., 1975. Iredale, Robyn, Guest Lecturer for GEOS 382: 24/10/02, University of Wollongong, Spring 2002. Jupp, J, From White Australia to Woomera: The Story of Australian Immigration, Cambridge University Press, Cambridge, UK, 2002. McConville, C, ‘Peopling the Place Again’ in Burgmann V and Lee J (eds), A Most Valuable Acquisition, A People’s History of Australia Since 1788, Penguin Books, Ringwood, 1988. McQueen, H, A New Britannia: an Argument concerning the Social Origins of Australian Radicalism and Nationalism, Penguin Books, Ringwood, 1970. Price, C, The Great White Walls are Built: Restrictive immigration to North America and Australasia 1836-1888, Australian Institute of International Affairs in association with Australian National University Press, Canberra, 1974. Selleck, Bruce, GEOS 382, University of Wollongong, Spring 2002. The Great White Wall Essay -- Australia Immigration Migration Papers The Great White Wall For most people, someone within their ancestral lineage has immigrated to a new country. Immigration has been perceived as a way to provide and enhance personal opportunities (McConville: p 73). Overpopulation began to be a problem in many of the great empires in the early 19th century, and emigration seemed to provide the best opportunity for people to better themselves in a new world (McConville: p 73). Rather than draining the resources within one society, people were given the opportunity to form a new life and use the resources in another land (McConville: p 73). The Great White Wall Australia became portrayed as a haven from industrial capitalism (McConville: p 73). Many immigrants began to flood into the land where opportunities could be found. However, Australia flourished within a white society, providing only racist ideals to â€Å"rationalize and condone the colonial conquest, cultural domination, racial exclusion and economic inequality† (Evans: p 175). As McQueen put it, â€Å"Racism was the most important single component of Australian nationalism† (McQueen: p 29). Australia built a ‘white wall’ against any non-European immigrant and through racism as well as policy; segregation and sometimes even exclusion of non-whites was sustained. The influx of immigrants from around Europe and surrounding nations began to integrate into Australia and gave rise to a nation of opportunity. In the mid-1800’s the attraction of ‘men of energy’ to produce a stable working force for the economy became the basis for many policies set up to help integrate immigrants into the country (McConville: p 74). Immigration assistance became established primarily for agricultural workers and single women (McConvi... ..., 1975. Iredale, Robyn, Guest Lecturer for GEOS 382: 24/10/02, University of Wollongong, Spring 2002. Jupp, J, From White Australia to Woomera: The Story of Australian Immigration, Cambridge University Press, Cambridge, UK, 2002. McConville, C, ‘Peopling the Place Again’ in Burgmann V and Lee J (eds), A Most Valuable Acquisition, A People’s History of Australia Since 1788, Penguin Books, Ringwood, 1988. McQueen, H, A New Britannia: an Argument concerning the Social Origins of Australian Radicalism and Nationalism, Penguin Books, Ringwood, 1970. Price, C, The Great White Walls are Built: Restrictive immigration to North America and Australasia 1836-1888, Australian Institute of International Affairs in association with Australian National University Press, Canberra, 1974. Selleck, Bruce, GEOS 382, University of Wollongong, Spring 2002.

Accounting Concepts, Conventions and Solutions

Table of Contents QUESTION ONE: Accounting Concepts and Conventions1 a)Accounting Concepts1 i)The going concern concept. 1 ii)The accruals concept (or matching concept)1 iii)The entity concept:3 iv)The money measurement concept:3 v)The historical cost concept:4 vi)The realization concept:4 vii)Duality concept:4 b)Accounting conventions5 QUESTION TWO: Clashing accounting concepts and conventions that might bring about inconsistency in the accounting process9 1. Clash between the accruals/matching concept and the prudence convention9 2. Clash between the historical cost concept and Prudence convention9QUESTION THREE: Solutions to the clashing accounting concepts and conventions11 REFERENCES13 QUESTION ONE: Accounting Concepts and Conventions a) Accounting Concepts Accounting Concepts are broad basic assumptions that underlie the periodic financial accounts of business enterprises. They outline the rules of accounting that should be followed in preparation of all financial statements. T hese concepts are outlined in the International Accounting Standard 1(IAS 1)-presentation of financial statements. The word ‘concept’ in this context means an idea or thought that has a universal application.This includes; i) The going concern concept: implies that the business will continue in operational existence for the foreseeable future, and that there is no intention to put the company into liquidation or to make drastic cutbacks to the scale of operations. Financial statements should be prepared under the going concern basis unless the entity is being (or is going to be) liquidated or if it has ceased (or is about to cease) trading. The directors of a company must also disclose any significant doubts about the company’s future if and when they arise. ( Agatha,2010) The main significance f the going concern concept is that the assets of the business should not be valued at their ‘break-up’ value, which is the amount that they would sell for it they were sold off piecemeal and the business were thus broken up. ii) The accruals concept (or matching concept): states that revenue and costs must be recognized as they are earned or incurred, not as money is received or paid. They must be matched with one another so far as their relationship can be established or justifiably assumed, and dealt with in the profit and loss account of the period to which they relate. ExampleAssume that a firm makes a profit of ? 100 by matching the revenue (? 200) earned from the sale of 20 units against the cost (? 100) of acquiring them. (Williamson,2001) If, however, the firm had only sold eighteen units, it would have been incorrect to charge profit and loss account with the cost of twenty units; there is still two units in stock. If the firm intends to sell them later, it is likely to make a profit on the sale. Therefore, only the purchase cost of eighteen units (? 90) should be matched with the sales revenue, leaving a profit of ? 90. The ba lance sheet would therefore look like this: ? | Assets| | Stock (at cost, i. e. 2 x ? 5)| 10| Debtors (18 x ? 10)| 180| | 190| Liabilities| | Creditors| 100| | 90| Capital (profit for the period)| 90| If, however the firm had decided to give up selling units, then the going concern concept would no longer apply and the value of the two units in the balance sheet would be a break-up valuation rather than cost. Similarly, if the two unsold units were now unlikely to be sold at more than their cost of ? 5 each (say, because of damage or a fall in demand) then they should be recorded on the balance sheet at their net realizable value (i. . the likely eventual sales price less any expenses incurred to make them saleable, e. g. paint) rather than cost. This shows the application of the prudence concept. In this example, the concepts of going concern and matching are linked. Because the business is assumed to be a going concern it is possible to carry forward the cost of the unsold units a s a charge against profits of the next period. Essentially, the accruals concept states that, in computing profit, revenue earned must be matched against the expenditure incurred in earning it. ii) The entity concept: The concept is that accountants regard a business as a separate entity, distinct from its owners or managers. The concept applies whether the business is a limited company (and so recognized in law as a separate entity) or a sole proprietorship or partnership (in which case the business is not separately recognized by the law. iv) The money measurement concept: The money measurement concept states that accounts will only deal with those items to which a monetary value can be attributed.For example, in the balance sheet of a business, monetary values can be attributed to such assets as machinery (e. g. the original cost of the machinery; or the amount it would cost to replace the machinery) and stocks of goods (e. g. the original cost of goods, or, theoretically, the pr ice at which the goods are likely to be sold). The monetary measurement concept introduces limitations to the subject matter of accounts. A business may have intangible assets such as the flair of a good manager or the loyalty of its workforce.These may be important enough to give it a clear superiority over an otherwise identical business, but because they cannot be evaluated in monetary terms they do not appear anywhere in the accounts. v) The historical cost concept: A basic concept of accounting is that resources are normally stated in accounts at historical cost, i. e. at the amount that the business paid to acquire them. An important advantage of this procedure is that the objectivity of accounts is maximized: there is usually objective, documentary evidence to prove the amount paid to purchase an asset or pay an expense.Historical cost means transactions are recorded at the cost when they occurred. In general, accountants prefer to deal with costs, rather than with ‘val ues’. This is because valuations tend to be subjective and to vary according to what the valuation is for. For example, suppose that a company acquires a machine to manufacture its products. The machine has an expected useful life of four years. At the end of two years the company is preparing a balance sheet and has decided what monetary amount to attribute to the asset. vi) The realization concept: Realization: Revenue and profits are recognized when realized.The concept states that revenue and profits are not anticipated but are recognized by inclusion in the income statement only when realized in the form of either cash or of other assets the ultimate cash realization of which can be assessed with reasonable certainty. vii) Duality concept: This concept ensures that transactions are recorded in books at least in two accounts, if one account is debited it’s also credited with the same amount in a different account. The recording system is also known as double entry system. Assets = Liabilities + Capital.Every transaction has a two-fold effect in the accounts and is the basis of double entry bookkeeping. b) Accounting conventions Conventions, unlike concepts, are guidelines derived by usage and practice. They are guidelines that arise from the practical application of accounting principles. An accounting convention is not a legally-binding practice; rather, it is a generally-accepted convention based on customs, and is designed to help accountants overcome practical problems that arise out of the preparation of financial statements. As customs change, so to will accounting conventions.Basically, conventions fill in the gaps between guidelines and practical usage. If an accounting regulatory body sets forth a guideline that addresses the same topic as the accounting convention, the accounting convention will no longer be applicable. Concepts supersede conventions. i) The consistency concept states that in preparing accounts consistency should be observed in two respects. a)Similar items within a single set of accounts should be given similar accounting treatment. b)The same treatment should be applied from one period to another in accounting for similar items.This enables valid comparisons to be made from one period to the next. (Crovit,2008) An accounting method used in one accounting period should be the same as the method used for events or transactions which are materially similar in other period (i. e. accounting practices should remain unchanged from period to period ). This also involves treatment of transaction and valuation method. Consistency is also advisable so that the comparison of accounting figures over time is meaningful. Consistency also states that if a change becomes necessary, the change and its effect should be clearly stated. i) The materiality concept: An item is considered material if it’s omission or misstatement will affect the decision making process of the users. Materiality depends on t he nature and size of the item. Only items material in amount or in their nature will affect the true and fair view given by a set of accounts. An error that is too trivial to affect anyone’s understanding of the accounts is referred to as immaterial. In preparing accounts it is important to assess what is material and what is not, so that time and money are not wasted in the pursuit of excessive detail.Determining whether or not an item is material is a very subjective exercise. There is no absolute measure of materiality. It is common to apply a convenient rule of thumb (for example to define material items as those with a value greater than 5% of the net profit disclosed by the accounts). But some items disclosed in accounts are regarded as particularly sensitive and even a very small misstatement of such an item would be regarded as a material error. An example in the accounts of a limited company might be the amount of remuneration paid to directors of the company.The as sessment of an item as material or immaterial may affect its treatment in the accounts. For example, the profit and loss account of a business will show the expenses incurred by he business grouped under suitable captions (heating and lighting expenses, rent and rates expenses etc); but in the case of very small expenses it may be appropriate to lump them together under a caption such as ‘sundry expenses’, because a more detailed breakdown would be inappropriate for such immaterial amounts. a)If a balance sheet shows fixed assets of ? million and stocks of ? 30,000 an error of ? 20,000 in the depreciation calculations might not be regarded as material, whereas an error of ? 20,000 in the stock valuation probably would be. In other words, the total of which the erroneous item forms part must be considered. b)If a business has a bank loan of ? 50,000 balance and a ? 55,000 balance on bank deposit account, it might well be regarded as a material misstatement if these two a mounts were displayed on the balance sheet as ‘cash at bank ? ,000’. In other words, incorrect presentation may amount to material misstatement even if there is no monetary error. iii) The Prudence convention (conservatism): The prudence convention ( classified as a concept by some others) states that where alternative procedures, or alternative valuations, are possible, the one selected should be the one that gives the most cautious presentation of the business’s financial position or results.This policy tends to understate rather than overstate net assets and net income, and therefore lead entities to â€Å"play safe†. In accounting, it states that when choosing between two solutions, the one that will be least likely to overstate assets and income should be selected. According to this concept â€Å"expected losses are losses but expected gains are not gains†. On the basis of this concept closing stock is valued at cost price or market price, whic hever is lower. Provisions for bad and doubtful debts are maintained.Therefore, revenue and profits are not anticipated but are recognized by inclusion in the profit and loss account only when realized in the form of either cash or of other assets the ultimate cash realization of which can be assessed with reasonable certainty: provision is made for all liabilities (expenses and losses) whether the amount of these is known with certainty or is best estimate in the light of the information available. (Pixley,2002) Assets and profits should not be overstated, but a balance must be achieved to prevent the material overstatement of liabilities or losses.The other aspect of the prudence concept is that where a loss is foreseen, it should be anticipated and taken into account immediately. If a business purchases stock for ? 1,200 but because of a sudden slump in the market only ? 900 is likely to be realized when the stock is sold the prudence concept dictates that the stock should be val ued at ? 900. It is not enough to wait until the stock is sold, and then recognize the ? 300 loss; it must be recognized as soon as it is foreseen. (Pixley,2002) A profit can be considered to be a realized profit when it is in the form of: †¢Cash Another asset that has a reasonably certain cash value. This includes amounts owing from debtors, provided that there is a reasonable certainty that the debtors will eventually pay up what they owe. Example A company begins trading on 1 January 20X2 and sells goods worth ? 100,000 during the year to 31 December. At 31 December there are debts outstanding of ? 15,000. Of these, the company is now doubtful whether ? 6,000 will ever be paid. The company should make a provision for doubtful debts of ? 6,000. Sales for 20Ãâ€"5 will be shown in the profit and loss account at their full value of ? 00,000, but the provision for doubtful debts would be a charge of ? 6,000. Because there is some uncertainty that the sales will be realized in th e form of cash, the prudence concept dictates that the ? 6,000 should not be included in the profit for the year. iv) Objectivity (neutrality): An accountant must show objectivity in his work. This means he should try to strip his answers of any personal opinion or prejudice and should be as precise and as detailed as the situation warrants. The result of this should be that any number of accountants will give the same answer independently of each other.Objectivity means that accountants must be free from bias. They must adopt a neutral stance when analyzing accounting data. In practice objectivity is difficult. Two accountants faced with the same accounting data may come to different conclusions as to the correct treatment. It was to combat subjectivity that accounting standards were developed. v) Full disclosure It states that information that might affect the judgments of the users of financial information should be presented in the main body of financial statements or in the not es or as supplementary information.Amounts and kinds of information disclosed should be decided based on a tradeoff analysis as a larger amount of information costs more to prepare than to use. Information disclosed should be enough to make a judgment while keeping costs reasonable. QUESTION TWO: Clashing accounting concepts and conventions that might bring about inconsistency in the accounting process Accounting concepts or conventions could clash or there could be inconsistency between them in such a way that users may have more than one definite method of treating items in the financial statements hence causing uncertainty.Examples include: 1. Clash between the accruals/matching concept and the prudence convention The accruals concept requires future income (e. g. in relation to credit sales) to be accrued. On the other hand the prudence concept dictates that caution should be exercised, so that if there is doubt about the subsequent receipt, no accrual should be made. There is a clash in that credit sales should be recognised immediately the sale is made (regardless of payment) under accrual concept while prudence states that incomes be recognized only when receipt is certain.A good example would be the treatment of deferred revenue expenditures that are usually spread over a number of years, during which the organisation is expected to earn additional revenue out of the expenditure. While this treatment is an accepted principle, there may be a counter-treatment, argued by another group, to charge the item as an expense, the entire amount in the year it was spent, on the grounds of conservatism/prudence. In other words, there may be a direct clash between the accruals and conservatism principles. 2.Clash between the historical cost concept and Prudence convention The prudence convention states that where alternative procedures, or alternative valuations, are possible, the one selected should be the one that gives the most cautious presentation of the busin ess’s financial position or results. Therefore it requires that stocks should always be valued at the lowest of cost or net realisable value. Net realisable value is the selling price of the stock minus any costs involved in getting this stock into saleable condition (e. g. repair costs).This means that we can value stock at current market rates, but only if the selling price is lower than the cost. However, if the replacement cost of these stocks is lower than cost or net realisable value then it may seem prudent to use the replacement cost to value these stocks. On the other hand, the historical cost concept implies that all assets acquired, service rendered or received, expenses incurred etc. should be recorded in the books at the price at which it was acquired (its cost price). The cost is distinct from its value and the record does not signify the value.It also holds that cost is the most reliable and verifiable value at which a good is or services should be initially re cognized. Therefore in determining inventory prices, the two principles may clash in application. QUESTION THREE: Solutions to the clashing accounting concepts and conventions William (2001) outlines basic rules that should be observed in applying particular accounting concepts in case of conflict. He states that despite the fact that most of the concepts have been universally accepted, accountants quite often come across situations where two concepts are in onflict and one overrides the application of the other. These are situations where an accountant will find it necessary to apply his professional skill and judgment to come up with the best possible solution. To quote from IAS 1, â€Å"There are many different accounting policies in use even in relation to the same subject: judgment is required in selecting and applying those which, in the circumstances of the enterprise, are best suited to present properly its financial position and the results of its operation. † 1. Sol ution to the clash between accruals and prudence When there is a clash between the two, prudence prevails.Although the accruals concept is universally accepted in trading and manufacturing organizations, there are occasions when the concept of conservatism overrides the application of the accruals concept. A typical example would be the accounts prepared for professional firms of accountants, lawyers and medical practitioners. In these accounts, recognition is generally given to the accruals concept insofar as it relates to expenses. In computing the incomes, however, a rather conservative approach is followed and only those items that are actually realized are accounted for in the accounts.This treatment has been accepted by the accountancy profession on the grounds of conservatism, although it generally defeats the concept of the accruals concept. When the accountant has a choice between two alternative treatments, remember, he should select the one that shows a less encouraging p osition of the financial situation. To follow the principle of conservatism is not easy; and good judgment is necessary to decide the right course of action. There is however, a great deal of difference between being conservative and being over conservative.The rule of conservatism should not be stretched to the point where it might eventually result in distorting the financial results. For example, capital items such as buildings, vehicles, machinery etc, which are capitalized in accordance with Generally Accepted Accounting Principles (GAAPs), must always be capitalized and no deviation should be recommended on the grounds of conservatism. 2. Solution to the clash between historical cost concept and Prudence convention Williamson (2001) states that prudence should prevail over the historical cost concept.This is important in order for financial statements to avoid overstating profits or disguising losses which may lead users to make wrong decisions. An example is that of fixed ass ets which should be valued at their historical cost (because it is objective). However, it is prudent to reduce their values to reflect wear and tear so as not to overstate profits. Also, according to the accruals concept, we should match an expense to when it was incurred. Therefore, fixed assets should appear as their historical cost less any depreciation.Also, the cost of these assets should be ‘spread' over their lifetime in the accounts. REFERENCES 1. Agatha J. , Mengyu and W. ,Askew S. ,(2010). â€Å"The Switch from US GAAP to IFRS†. Proceedings of the Northeast Business & Economics Association 48–54 2. Arens A. , and Loebbecke, J. , â€Å"Auditing, an integrated approach†, 1980 Prentice Hall 3. Carruthers, Bruce G. , & Espeland, Wendy Nelson, Accounting for Rationality: Double-Entry Bookkeeping and the Rhetoric of Economic Rationality, American Journal of Sociology, Vol. 7, No. 1, July 1991, pp. 40-41,44 46 4. Crovitz, L. (2008). â€Å"Closing the Information GAAP†. The Wall Street Journal vol III 5. Oldroyd, David & Dobie, Alisdair: Themes in the history of bookkeeping, The Routledge Companion to Accounting History, London, July 2008 6. Pixley, Francis William: Accountancy—constructive and recording accountancy (Sir Isaac Pitman & Sons, Ltd, London, 2002) 7. Williamson, D. (2001), Accounting Business Spreadsheeting, Prentice Hall, London Accounting Concepts, Conventions and Solutions Table of Contents QUESTION ONE: Accounting Concepts and Conventions1 a)Accounting Concepts1 i)The going concern concept. 1 ii)The accruals concept (or matching concept)1 iii)The entity concept:3 iv)The money measurement concept:3 v)The historical cost concept:4 vi)The realization concept:4 vii)Duality concept:4 b)Accounting conventions5 QUESTION TWO: Clashing accounting concepts and conventions that might bring about inconsistency in the accounting process9 1. Clash between the accruals/matching concept and the prudence convention9 2. Clash between the historical cost concept and Prudence convention9QUESTION THREE: Solutions to the clashing accounting concepts and conventions11 REFERENCES13 QUESTION ONE: Accounting Concepts and Conventions a) Accounting Concepts Accounting Concepts are broad basic assumptions that underlie the periodic financial accounts of business enterprises. They outline the rules of accounting that should be followed in preparation of all financial statements. T hese concepts are outlined in the International Accounting Standard 1(IAS 1)-presentation of financial statements. The word ‘concept’ in this context means an idea or thought that has a universal application.This includes; i) The going concern concept: implies that the business will continue in operational existence for the foreseeable future, and that there is no intention to put the company into liquidation or to make drastic cutbacks to the scale of operations. Financial statements should be prepared under the going concern basis unless the entity is being (or is going to be) liquidated or if it has ceased (or is about to cease) trading. The directors of a company must also disclose any significant doubts about the company’s future if and when they arise. ( Agatha,2010) The main significance f the going concern concept is that the assets of the business should not be valued at their ‘break-up’ value, which is the amount that they would sell for it they were sold off piecemeal and the business were thus broken up. ii) The accruals concept (or matching concept): states that revenue and costs must be recognized as they are earned or incurred, not as money is received or paid. They must be matched with one another so far as their relationship can be established or justifiably assumed, and dealt with in the profit and loss account of the period to which they relate. ExampleAssume that a firm makes a profit of ? 100 by matching the revenue (? 200) earned from the sale of 20 units against the cost (? 100) of acquiring them. (Williamson,2001) If, however, the firm had only sold eighteen units, it would have been incorrect to charge profit and loss account with the cost of twenty units; there is still two units in stock. If the firm intends to sell them later, it is likely to make a profit on the sale. Therefore, only the purchase cost of eighteen units (? 90) should be matched with the sales revenue, leaving a profit of ? 90. The ba lance sheet would therefore look like this: ? | Assets| | Stock (at cost, i. e. 2 x ? 5)| 10| Debtors (18 x ? 10)| 180| | 190| Liabilities| | Creditors| 100| | 90| Capital (profit for the period)| 90| If, however the firm had decided to give up selling units, then the going concern concept would no longer apply and the value of the two units in the balance sheet would be a break-up valuation rather than cost. Similarly, if the two unsold units were now unlikely to be sold at more than their cost of ? 5 each (say, because of damage or a fall in demand) then they should be recorded on the balance sheet at their net realizable value (i. . the likely eventual sales price less any expenses incurred to make them saleable, e. g. paint) rather than cost. This shows the application of the prudence concept. In this example, the concepts of going concern and matching are linked. Because the business is assumed to be a going concern it is possible to carry forward the cost of the unsold units a s a charge against profits of the next period. Essentially, the accruals concept states that, in computing profit, revenue earned must be matched against the expenditure incurred in earning it. ii) The entity concept: The concept is that accountants regard a business as a separate entity, distinct from its owners or managers. The concept applies whether the business is a limited company (and so recognized in law as a separate entity) or a sole proprietorship or partnership (in which case the business is not separately recognized by the law. iv) The money measurement concept: The money measurement concept states that accounts will only deal with those items to which a monetary value can be attributed.For example, in the balance sheet of a business, monetary values can be attributed to such assets as machinery (e. g. the original cost of the machinery; or the amount it would cost to replace the machinery) and stocks of goods (e. g. the original cost of goods, or, theoretically, the pr ice at which the goods are likely to be sold). The monetary measurement concept introduces limitations to the subject matter of accounts. A business may have intangible assets such as the flair of a good manager or the loyalty of its workforce.These may be important enough to give it a clear superiority over an otherwise identical business, but because they cannot be evaluated in monetary terms they do not appear anywhere in the accounts. v) The historical cost concept: A basic concept of accounting is that resources are normally stated in accounts at historical cost, i. e. at the amount that the business paid to acquire them. An important advantage of this procedure is that the objectivity of accounts is maximized: there is usually objective, documentary evidence to prove the amount paid to purchase an asset or pay an expense.Historical cost means transactions are recorded at the cost when they occurred. In general, accountants prefer to deal with costs, rather than with ‘val ues’. This is because valuations tend to be subjective and to vary according to what the valuation is for. For example, suppose that a company acquires a machine to manufacture its products. The machine has an expected useful life of four years. At the end of two years the company is preparing a balance sheet and has decided what monetary amount to attribute to the asset. vi) The realization concept: Realization: Revenue and profits are recognized when realized.The concept states that revenue and profits are not anticipated but are recognized by inclusion in the income statement only when realized in the form of either cash or of other assets the ultimate cash realization of which can be assessed with reasonable certainty. vii) Duality concept: This concept ensures that transactions are recorded in books at least in two accounts, if one account is debited it’s also credited with the same amount in a different account. The recording system is also known as double entry system. Assets = Liabilities + Capital.Every transaction has a two-fold effect in the accounts and is the basis of double entry bookkeeping. b) Accounting conventions Conventions, unlike concepts, are guidelines derived by usage and practice. They are guidelines that arise from the practical application of accounting principles. An accounting convention is not a legally-binding practice; rather, it is a generally-accepted convention based on customs, and is designed to help accountants overcome practical problems that arise out of the preparation of financial statements. As customs change, so to will accounting conventions.Basically, conventions fill in the gaps between guidelines and practical usage. If an accounting regulatory body sets forth a guideline that addresses the same topic as the accounting convention, the accounting convention will no longer be applicable. Concepts supersede conventions. i) The consistency concept states that in preparing accounts consistency should be observed in two respects. a)Similar items within a single set of accounts should be given similar accounting treatment. b)The same treatment should be applied from one period to another in accounting for similar items.This enables valid comparisons to be made from one period to the next. (Crovit,2008) An accounting method used in one accounting period should be the same as the method used for events or transactions which are materially similar in other period (i. e. accounting practices should remain unchanged from period to period ). This also involves treatment of transaction and valuation method. Consistency is also advisable so that the comparison of accounting figures over time is meaningful. Consistency also states that if a change becomes necessary, the change and its effect should be clearly stated. i) The materiality concept: An item is considered material if it’s omission or misstatement will affect the decision making process of the users. Materiality depends on t he nature and size of the item. Only items material in amount or in their nature will affect the true and fair view given by a set of accounts. An error that is too trivial to affect anyone’s understanding of the accounts is referred to as immaterial. In preparing accounts it is important to assess what is material and what is not, so that time and money are not wasted in the pursuit of excessive detail.Determining whether or not an item is material is a very subjective exercise. There is no absolute measure of materiality. It is common to apply a convenient rule of thumb (for example to define material items as those with a value greater than 5% of the net profit disclosed by the accounts). But some items disclosed in accounts are regarded as particularly sensitive and even a very small misstatement of such an item would be regarded as a material error. An example in the accounts of a limited company might be the amount of remuneration paid to directors of the company.The as sessment of an item as material or immaterial may affect its treatment in the accounts. For example, the profit and loss account of a business will show the expenses incurred by he business grouped under suitable captions (heating and lighting expenses, rent and rates expenses etc); but in the case of very small expenses it may be appropriate to lump them together under a caption such as ‘sundry expenses’, because a more detailed breakdown would be inappropriate for such immaterial amounts. a)If a balance sheet shows fixed assets of ? million and stocks of ? 30,000 an error of ? 20,000 in the depreciation calculations might not be regarded as material, whereas an error of ? 20,000 in the stock valuation probably would be. In other words, the total of which the erroneous item forms part must be considered. b)If a business has a bank loan of ? 50,000 balance and a ? 55,000 balance on bank deposit account, it might well be regarded as a material misstatement if these two a mounts were displayed on the balance sheet as ‘cash at bank ? ,000’. In other words, incorrect presentation may amount to material misstatement even if there is no monetary error. iii) The Prudence convention (conservatism): The prudence convention ( classified as a concept by some others) states that where alternative procedures, or alternative valuations, are possible, the one selected should be the one that gives the most cautious presentation of the business’s financial position or results.This policy tends to understate rather than overstate net assets and net income, and therefore lead entities to â€Å"play safe†. In accounting, it states that when choosing between two solutions, the one that will be least likely to overstate assets and income should be selected. According to this concept â€Å"expected losses are losses but expected gains are not gains†. On the basis of this concept closing stock is valued at cost price or market price, whic hever is lower. Provisions for bad and doubtful debts are maintained.Therefore, revenue and profits are not anticipated but are recognized by inclusion in the profit and loss account only when realized in the form of either cash or of other assets the ultimate cash realization of which can be assessed with reasonable certainty: provision is made for all liabilities (expenses and losses) whether the amount of these is known with certainty or is best estimate in the light of the information available. (Pixley,2002) Assets and profits should not be overstated, but a balance must be achieved to prevent the material overstatement of liabilities or losses.The other aspect of the prudence concept is that where a loss is foreseen, it should be anticipated and taken into account immediately. If a business purchases stock for ? 1,200 but because of a sudden slump in the market only ? 900 is likely to be realized when the stock is sold the prudence concept dictates that the stock should be val ued at ? 900. It is not enough to wait until the stock is sold, and then recognize the ? 300 loss; it must be recognized as soon as it is foreseen. (Pixley,2002) A profit can be considered to be a realized profit when it is in the form of: †¢Cash Another asset that has a reasonably certain cash value. This includes amounts owing from debtors, provided that there is a reasonable certainty that the debtors will eventually pay up what they owe. Example A company begins trading on 1 January 20X2 and sells goods worth ? 100,000 during the year to 31 December. At 31 December there are debts outstanding of ? 15,000. Of these, the company is now doubtful whether ? 6,000 will ever be paid. The company should make a provision for doubtful debts of ? 6,000. Sales for 20Ãâ€"5 will be shown in the profit and loss account at their full value of ? 00,000, but the provision for doubtful debts would be a charge of ? 6,000. Because there is some uncertainty that the sales will be realized in th e form of cash, the prudence concept dictates that the ? 6,000 should not be included in the profit for the year. iv) Objectivity (neutrality): An accountant must show objectivity in his work. This means he should try to strip his answers of any personal opinion or prejudice and should be as precise and as detailed as the situation warrants. The result of this should be that any number of accountants will give the same answer independently of each other.Objectivity means that accountants must be free from bias. They must adopt a neutral stance when analyzing accounting data. In practice objectivity is difficult. Two accountants faced with the same accounting data may come to different conclusions as to the correct treatment. It was to combat subjectivity that accounting standards were developed. v) Full disclosure It states that information that might affect the judgments of the users of financial information should be presented in the main body of financial statements or in the not es or as supplementary information.Amounts and kinds of information disclosed should be decided based on a tradeoff analysis as a larger amount of information costs more to prepare than to use. Information disclosed should be enough to make a judgment while keeping costs reasonable. QUESTION TWO: Clashing accounting concepts and conventions that might bring about inconsistency in the accounting process Accounting concepts or conventions could clash or there could be inconsistency between them in such a way that users may have more than one definite method of treating items in the financial statements hence causing uncertainty.Examples include: 1. Clash between the accruals/matching concept and the prudence convention The accruals concept requires future income (e. g. in relation to credit sales) to be accrued. On the other hand the prudence concept dictates that caution should be exercised, so that if there is doubt about the subsequent receipt, no accrual should be made. There is a clash in that credit sales should be recognised immediately the sale is made (regardless of payment) under accrual concept while prudence states that incomes be recognized only when receipt is certain.A good example would be the treatment of deferred revenue expenditures that are usually spread over a number of years, during which the organisation is expected to earn additional revenue out of the expenditure. While this treatment is an accepted principle, there may be a counter-treatment, argued by another group, to charge the item as an expense, the entire amount in the year it was spent, on the grounds of conservatism/prudence. In other words, there may be a direct clash between the accruals and conservatism principles. 2.Clash between the historical cost concept and Prudence convention The prudence convention states that where alternative procedures, or alternative valuations, are possible, the one selected should be the one that gives the most cautious presentation of the busin ess’s financial position or results. Therefore it requires that stocks should always be valued at the lowest of cost or net realisable value. Net realisable value is the selling price of the stock minus any costs involved in getting this stock into saleable condition (e. g. repair costs).This means that we can value stock at current market rates, but only if the selling price is lower than the cost. However, if the replacement cost of these stocks is lower than cost or net realisable value then it may seem prudent to use the replacement cost to value these stocks. On the other hand, the historical cost concept implies that all assets acquired, service rendered or received, expenses incurred etc. should be recorded in the books at the price at which it was acquired (its cost price). The cost is distinct from its value and the record does not signify the value.It also holds that cost is the most reliable and verifiable value at which a good is or services should be initially re cognized. Therefore in determining inventory prices, the two principles may clash in application. QUESTION THREE: Solutions to the clashing accounting concepts and conventions William (2001) outlines basic rules that should be observed in applying particular accounting concepts in case of conflict. He states that despite the fact that most of the concepts have been universally accepted, accountants quite often come across situations where two concepts are in onflict and one overrides the application of the other. These are situations where an accountant will find it necessary to apply his professional skill and judgment to come up with the best possible solution. To quote from IAS 1, â€Å"There are many different accounting policies in use even in relation to the same subject: judgment is required in selecting and applying those which, in the circumstances of the enterprise, are best suited to present properly its financial position and the results of its operation. † 1. Sol ution to the clash between accruals and prudence When there is a clash between the two, prudence prevails.Although the accruals concept is universally accepted in trading and manufacturing organizations, there are occasions when the concept of conservatism overrides the application of the accruals concept. A typical example would be the accounts prepared for professional firms of accountants, lawyers and medical practitioners. In these accounts, recognition is generally given to the accruals concept insofar as it relates to expenses. In computing the incomes, however, a rather conservative approach is followed and only those items that are actually realized are accounted for in the accounts.This treatment has been accepted by the accountancy profession on the grounds of conservatism, although it generally defeats the concept of the accruals concept. When the accountant has a choice between two alternative treatments, remember, he should select the one that shows a less encouraging p osition of the financial situation. To follow the principle of conservatism is not easy; and good judgment is necessary to decide the right course of action. There is however, a great deal of difference between being conservative and being over conservative.The rule of conservatism should not be stretched to the point where it might eventually result in distorting the financial results. For example, capital items such as buildings, vehicles, machinery etc, which are capitalized in accordance with Generally Accepted Accounting Principles (GAAPs), must always be capitalized and no deviation should be recommended on the grounds of conservatism. 2. Solution to the clash between historical cost concept and Prudence convention Williamson (2001) states that prudence should prevail over the historical cost concept.This is important in order for financial statements to avoid overstating profits or disguising losses which may lead users to make wrong decisions. An example is that of fixed ass ets which should be valued at their historical cost (because it is objective). However, it is prudent to reduce their values to reflect wear and tear so as not to overstate profits. Also, according to the accruals concept, we should match an expense to when it was incurred. Therefore, fixed assets should appear as their historical cost less any depreciation.Also, the cost of these assets should be ‘spread' over their lifetime in the accounts. REFERENCES 1. Agatha J. , Mengyu and W. ,Askew S. ,(2010). â€Å"The Switch from US GAAP to IFRS†. Proceedings of the Northeast Business & Economics Association 48–54 2. Arens A. , and Loebbecke, J. , â€Å"Auditing, an integrated approach†, 1980 Prentice Hall 3. Carruthers, Bruce G. , & Espeland, Wendy Nelson, Accounting for Rationality: Double-Entry Bookkeeping and the Rhetoric of Economic Rationality, American Journal of Sociology, Vol. 7, No. 1, July 1991, pp. 40-41,44 46 4. Crovitz, L. (2008). â€Å"Closing the Information GAAP†. The Wall Street Journal vol III 5. Oldroyd, David & Dobie, Alisdair: Themes in the history of bookkeeping, The Routledge Companion to Accounting History, London, July 2008 6. Pixley, Francis William: Accountancy—constructive and recording accountancy (Sir Isaac Pitman & Sons, Ltd, London, 2002) 7. Williamson, D. (2001), Accounting Business Spreadsheeting, Prentice Hall, London

Addressing Inequality in the “Land of Opportunity”

The meaning or definition of what America is, was, or could become is the main subject that the two opposing voices relate in Langston Hughes’ poem Let America be America Again. Both voices acknowledge America is not the America that was envisioned by its founders/architects – i.e. a state built on the principles of freedom and equality, a land of opportunity for all. However, while the first voice simply calls for a recovery of the ideal America, the second voice, through articulations of the reality of social inequalities in America, argues for a reexamination of the said ideal, with the desired effect of making America  Ã‚   â€Å"The land that never has been yet–/And yet must be–the land where every man is free.† (lines 19-20) â€Å"Let America be America again† (line 1) , the first speaker begins. To him, America was a dream of dreamers, a â€Å"great strong land of love† (line 7), where â€Å"opportunity is real, and life is free/equality is in the air we breathe†. (line 13) He assertively states his notions of what America ought to be. However, he fails to identify what America has become instead. He also does not specify who the dreamers that dreamed America are, nor does he clarify who the â€Å"we† for whom equality. The choice of word â€Å"again† and the first speaker’s c onstant use of it suggest that to put America to its right direction, one needs to reacquaint the state to the glories it once had. However the assertion of the second speaker of America as the â€Å"never was† contrasts the difference of position of the two speakers. The second speaker contests the possibility that America had been the place where equality once reigned as he mumbles back to the first speaker that   Ã¢â‚¬Å"(There's never been equality for me/Nor freedom in this ‘homeland of the free.’) (lines 15-16) The disillusionment or discontentment in the tone of the second speaker who claims he is one of â€Å"the people† who built America challenges the first speaker’s idealization of America’s past. Also read: Was the American West a Land of Opportunity? The first speaker talks of freedom, equality for all but he/she could not even realize that there could be an opposition or challenge to his/her claims so he/she asks â€Å"Say, who are you that mumbles in the dark? /And who are you that draws your veil across the stars?† (lines 17-18) when he/she hears mumbles as he/she spoke. The first speaker addresses the person as if their existence were hardly thought of as he/she talked about America’s past and future. The second voice introduces himself: â€Å"I am† as the first voice is unable to recognize the second voice, who represents disenfranchised classes in America, the very reason America is not his ideal America, shows the first speaker's position in the society he seeks altered: he is an observer, not immersed in the reality of inequality and selective granting of rights, which the second voice knows first-hand.     Further on, he states that he (they) originated the dream of America. He briefly details America's founders – immigrants all, seeking escape from serfdom in the Old World, desiring a â€Å"home of the free’. According to the second voice, as America was founded by immigrants, and its industries and agriculture were built and maintained by laborers, these members of American society have a historically-supported claim to the freedom and equality deprived of them. The second speaker calls for a collective action of the people to rebuild America to be a place for the people, the dreamers who could call it â€Å"the land of the free† and not just for the few privileged people. The contesting ideas of the two voices/speakers in the poem about America stress that America as a country, as a word and even as a symbol for freedom and equality is a space of struggle between those who have the luxury to contemplate an abstract America and those who are immersed with the reality of how oppressive America is to the working classes and the ones with racial distinctions. To one, America is the dream of vague dreamers meant for an unspecified mass. To the other, America is a state built by people wishing to escape oppression in their nations of origin. America could not just be painted in the perspective of one person and that discussion of freedom and equality could not be easily hoped for a country until one recognizes the problems faced by all sectors of the society.