LEGAL AND FINANCIAL ENVIRONMENT - Assignment Example

This is the proportion of work done at the end of that period. UITF 40 method increases profits and tax. A single charge for service providers results in high financial difficulties and may lead to closure of the business. This affects service providers where a large amount of revenue is earned by owners and not employees. In case the contract is short-term, revenue is earned after selling or after working. Sometimes it may take place after delivery of the goods and their acceptance by the customers.

Identification of UITF Abstract 40 has the highest benefits to proprietors who have contributed the highest value of the contract. Prior year adjustment accounts require a review of WIP for the earlier years which includes opening and closing balances, goodwill in the balance sheet that has been written off or amortised for any contracts that are in progress. All previous year’s figures are restated. All unaudited company accounts are added. While calculating incomes, ACCA advises that owners should deduct any incomplete work that is not billed in debtors-accrued income.

Deduct all unclear balances of any contract; write off all insignificant amounts or any balances. Time records, diaries assess recovery records. The value of debtors is calculated as unbilled contracts. This contract contains all conditions agreed upon. They may include payment, working hours, overtime work and pay and resignation notices. Grace and Taylor require a written employment contract since they are many and work in various departments. According to Crmraeg (2014), employment contract contains employees’ employment conditions, their rights, responsibilities, and duties.

Contracts are effective from the beginning of the work offer. The commencement of work indicates that the worker has agreed to the terms of the contract with the employer. Contracts will benefit this company since it contains details of payments, holidays,