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

Toy Central-Accounting Issues - Essay ExampleThe researcher states that the presentation of financial statements should infract transactions for related parties, accounting policies of the organization, and conflicts of interest between Troy Central confederacy and the transacting parties. The boundic financial statements need to be reviewed to ascertain adherence and change the necessary revisions in the organization with respect to corporate requirements. Capitalized be or licensing fees of Toy Central Corporation should be expensed when incurred considering the fact that assets atomic number 18 customd up. Expenses atomic number 18 considered as money flowing out and liabilities are being incurred. The costs are incurred in the process of manufacturing toys, carrying out other companys activities that ask the ongoing central operations and offering other related services. Amortization of costs over the life of a contract is get, since Toy Central Corporation is an ongoin g business. It is only acceptable for a period of not more than sixty months after the commencement of the business, the period of investigation of the probability for a vernal business that is being started. With regard to general business rules for expense deductions, it is not allowable to deduct the expenses of a new company, since expenses are assumed to be incurred foregoing the companys birth. It is outlined that only expenses for a company that has been in operation for a long time can be deducted. It is however appropriate to amortize the capitalization costs of a new company if start up expenditure results in an operational entity and the equal installments deductions are started within startle month of the business (Stickney, Weil, Schipper and Francis, 2009, p. 426-430) This process enables new companies to deduct the business investigating creation costs and the costs incurred in creating and starting up the business. It is important to score that the businesses can only deduct 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 specific business situations like marketing, research, and development to determine the viability of the business opportunity. Other costs such as 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 inconsistent with the generally accepted accounting principles. Delgo Movies u se Hollywood accounting to budget and keep records of film production financial gains. The issue of concern in Hollywood accounting is that expenditures of film production are often inflated to significantly reduce profits of the productions to decrease the burden of profit sharing agreements with respect