Intermediate Accounting 2 answeres - Essay Example

Finance and accounting Quiz 3 (i) In the process of recognizing and measurement of the uncertain tax position, the process calls for two vital processes. The first process is the recognition, and the second step is the computation level as comprehensively discussed below.Recognition process: this is the first process that requires an organization or a company to determine whether or not the tax position can be continued upon inspection. In the process, upon examination of the tax position, resolutions on any litigation process or rather any appeals on grounds of technical merits of the tax position will be integrated (Kieso et al., 2012). Additionally, the organization should deduce that the position will be examined by legitimate taxing authority with full concept and awareness of the significant when information when evaluating whether a tax position has met the more probable than not recognition threshold.

Measurement process: this is the second process that calls for measurement of a tax position that meets a threshold of more likely than not recognition in order to determine the benefit that should be recognized in the statements of financial position of respective organization or enterprise. A tax position, that has 50% benefits, is realized upon final settlement.(ii)Where an enterprise has a suit in the court of law regarding some past transactions and of which its settlement is still pending the tax is uncertain.

An area, where the taxpayers have determined that the service has a general managerial practice not to examine the position, leads to tax being uncertain.(iii)In IFRS, the company is allowed to make a recognition on tax asset when it probable while, in U.S. GAAP, more likely than not threshold is defined.IFRS allows an upward revaluation of some individual assets while U.S. GAAP does not make an allowance of such an upward revaluation (Bellandi 2012).IFRS requires deferred tax liabilities and assets to be classified as noncurrent in the balance sheets while, on the other hand, U.S.GAAP allows noncurrent and current classification of liabilities and assets leading to a slight difference.

IFRS does not give any specific guideline for the purposes of recognizing deferred tax liabilities that are associated with uncertain tax position while U.S.GAAP provides precise guidance for the recognition of the deferred tax liabilities.Question fourOther countries have a well-elaborated retirement systems that do not give rise to any suspicion. For example, a country like Australia, there is a government mandate for universal participation of workers in retirement plan (Unilever 2007). Netherlands have laws that require workers’ pension plans to be converted into lifetime annuities so as not to spend all their savings early.

Unlike other countries, U.S’s contributions are of low rate to assure retirement adequacy for the majority of middle-class workers and some other workers withdrawing their sums before the retirement age.United states have the authorization of employers paying 6.2 percent of their salaries to social security that is time and again overlooked drawing much attention to the accounting pension than other foreign countries that do not have such vices (Financial Accounting Standards Board. (2008). ReferencesBellandi, F. (2012). The Handbook to IFRS Transition and to IFRS U.S. GAAP Dual Reporting.

Hoboken: John Wiley & Sons.Financial Accounting Standards Board. (2008). An Analysis of additional issues related to employers accounting for pensions and other postemployment benefits. Stamford, Conn. (High Ridge Park: Financial Accounting Standards Board of the Financial Accounting Foundation.Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2012). Intermediate accounting. Hoboken, NJ: Wiley.Unilever (Firm). (2007). Accounting for pensions in company accounts. London: Research Committee of the Institute of Chartered Accountants in England and Wales.