Continuously Contemporary Accounting - 1692 Words

Introduction Over the past years there have been many accounting measurement systems developed to replace or serve as a supplement to historical cost accounting. However it is not possible, at present, to state which system, if any, is likely to replace the historical cost system. Perhaps the most notable system is Continuously Contemporary Accounting (CoCoA), proposed by Australian researcher, Raymond Chambers. Chambers quoted â€Å"†¦that thousands of shareholders had lost millions of dollars on security investments made on the basis on out-of-date information or on fiction which were reported as facts† (Deegan, 2000, p.112). In light of his comments Chambers believed that his system will provide relevant, accurate and up to date†¦show more content†¦This is because CoCoA has many advantages over historical cost accounting. CoCoA is based on common sense and simple to understand. The language used to describe and support the theory can be easily understood by statement users â€Å"as it is based on common sense and has implicit relevance to the field of accounting which has been accepted without scrutiny† (Laing, 2000, p.4). This brings us to the next point; CoCoA provides data that is relevant and useful for decisions whether continuity of existence is likely or unlikely. According to Henderson, Peirson and Harris (2004), continuity of existence is possible only if the entity adapts to changed circumstances. A failure to adapt is inviting the entity’s demise. Financial reports that emphasise adaptive capacity show the ability of an entity to adapt, by selling off its existing assets and buying an alternative set to ensure its survival. Alternatively, if liquidation is likely, the financial reports show data that is relevant. There is no necessity to switch to a different system of accounting when liquidation is imminent. CoCoA also avoids the difficulties encountered in historical cost system, of allocating costs for depreciation where the benefit pattern and the life of an asset can only be estimated. CoCoA depreciation however â€Å"is based solely on the decline in the current cashShow MoreRelatedOriginal Alternative Methods Of Historical Cost Accounting966 Words   |  4 Pagesutilize the Historical Cost accounting to report financial statements and reflect the profitability of business. It is more conventional and simple method. Nevertheless, when considered in relation to inflation and price changes, the alternative methods such as Current Purchasing Power Accounting (CPPA), Continuously Contemporary Accounting(CoCoA) and Current Cost Accounting(CCA) would be more appropriate. There is an assumption that ‘ applying those alternative forms of accounting to adjust items in financialRead More7101AFE Financial Accounting Theory And Practice Essay970 Words   |  4 PagesFinancial Accounti ng Theory and Practice Tutorial Questions for Tutorials 1- 6: Semester 1 2015 TUTORIAL 1 - Semester 1 2015 Deegan Topic 1: Introduction to financial accounting theory QUESTION 1 – Question 1.2: If you developed a theory to explain how a person’s cultural background influences how they prepare financial statements, would you have developed a positive theory or a normative theory? The first of all, it is important to understand the mean by a ‘theory’. According to Contemporary AccountingRead MoreA Critical Analysis of the Article : For Which Purposes Do Managers Use Balanced Scorecards?: an Empirical Study1019 Words   |  5 Pages1. Summary Resulting from the constantly changing environment, the accounting information systems transform and renovate continuously, for instance, the development from traditional costing system to activity-based costing or the Balanced Scorecard (BSC) which is an up-to-date system that connects non-financial and financial performance measures to a company s overall strategy (Kaplan and Norton 1996). The article aims at demonstrating the specific purposes for which managers use the BalancedRead MoreCoca-Colas Principles of Budgeting955 Words   |  4 Pagesorganizational culture; ascertaining that the budgeting procedure is operated in the same way as their planning, namely cautiously, thoroughly, and specifically before instantly acting on it; creating incentives for optimal performance; prioritizing; continuously updating and monitoring the budgeting plans; ensuring excellent communication through all division when budgeting planning is in process. Guidance regarding earnings was one of the prime components of the traditional budgeting process. Coca-ColaRead MoreThe Importance Of Inventory Management Systems Of Asda Essay1304 Words   |  6 Pages â€Å"To critically evaluate the importance of inventory management systems of Asda, UK† Abstract The topic has been chosen for research is to critically evaluate the inventory management systems of retail industry in UK. This industry is continuously growing up with pleasure of customers even the fluctuation in customer choices. Moreover, this sector has been hugely impacted from 2008 to 2010 by the economic crisis, when customer did not have enough money to spend. As a result some retail businessesRead MoreBUS1001 SEMESTER 1 ESSAY 3rd Of Novembe794 Words   |  4 Pagesmanagement function has largely been made redundant by the more recent empirical studies of what managers actually do, such as that favoured by Mintzberg. Intro: (89words) Management has constantly been a broad topic. Managing human resources is continuously unpredictable because we all react differently in comparable scenarios. However, for managers it is vital to be able to control an organisation efficiently, in order to exploit any opportunities open to it. Henri Fayol deliberated management backRead More An Analysis of To Have without Holding by Marge Piercy1390 Words   |  6 Pagesis for her to stray from that ideal in this instance. As the poem evolves, one can begin to see the author having a conflict with values, while simultaneously expressing which values are hers and which are unnatural to her. She accomplishes this accounting of values by personalizing her position in a somewhat unsettling way throughout the poem. I was first drawn to the poem by the title. The interesting use of capitalization caught my attention. Why wasnt the letter w in the word without capitalizedRead MoreCritical Thinking Exercise1726 Words   |  7 Pagessatisfied. 17. The company must desist from its deficit financing immediately. Ans: The company must forbear from its financial loss immediately. 18. This antiquated merchandising strategy is ineffectual in contemporary business operations. Ans: This old sales strategy is unsuccessful in contemporary business operations. 19. Percentage return on common stockholders ‘equity averaged 23.1 for the year. Ans: Profit on common stockholders’ equity averaged 23.1 for the year. 20. The company’s retainedRead MoreAccounting As A Career2623 Words   |  11 Pagesinvestigate the major I have chosen, Accounting. Because my goal is to become a Certified Public Accountant (CPA), I would like to know more of what it entails. Dealing with numbers, and recording and projecting the earnings of a company, accountants are placed with the responsibility of keeping track of the moneys of a business. God has blessed me with skills in the areas of mathematics and organization, which caused me to look for an occupation that utilizes both. Accounting seemed a logical choice sinceRead MoreEssay on How Technology Influences Children1331 Words   |  6 Pageson in their participation and negotiation of the technological environment. Assuming the position that childhood is a social phenomenon and children are active participants of society worthy of study in their own right, in-depth interviews have continuously been analyzed utilizing the grounded theory approach to de velop an understanding for the topic under study. Data analyses reveal that children assume an autonomous nature, constructing, interpreting, and manipulating their technological environment