IAS 16 and IAS 40(International Accounting Standards) Essay

IAS 16 and IAS 40(International Accounting Standards) - Essay Example How will Gale plc determine whether the building is an investment property or not? As per the presented information, it is hard to determine whether the building is an investment property. This is due to the fact that, according to the definition presented by IAS 40 in iasplus.com website, an investment property refers to such property that includes buildings and land or part of such that is either held by the legal owner or lessee for the purpose of earning rentals or for the reasons of achieving appreciation of capital or even both. Examples of such property are with the inclusion of land that is held for the prospected use in indefinite future or for the purposes of its appreciation in value, a building being leased under the type of lease known as operating lease or even any given property that has been developed or constructed for future utilisation as an investment property. Therefore, owner occupied property that is being held for future disposal does not really fall under inv estment properties. (iasplu.com, 2011) (b) After initial recognition, describe the accounting treatment that should be adopted for a building in accordance with IAS16, assuming it is not an investment property? IAS 16, as Holt writes, deals with (PPE) Plant, Property and Equipment. The definition put across by IAS 16 with regards to Plant, Property and Equipment is any tangible type of asset which any given entity may hold for rental purposes or for own use and which the same entity expects to utilise for more than a period. This PPE could have been either constructed or bought by the reporting entity. Any item falling under PPE has to be recognised by the reporting entity as an asset. In case the future benefits as well as losses that are expected from the asset can be reasonably quantified, then the item of PPE should be taken in the books of the entity as an asset. PPE, in accordance to IAS 16, is originally recognised in the books at the cost of the item and this is the fair val ue of the price paid to obtain the asset. The costs that have been incurred in the process of having the asset in its condition of working should be capitalised as the IAS states. These cost outlays may be with the inclusion of architects’ fee in the case of a building. If applicable directly attributable types of overhead costs as well as borrowing costs should form part of the costs. During the stage of production, all earned revenues should form part of the incomes in the income statement as opposed to capitalising the same. Following the initial recognition of such an asset that falls under PPE, like in this case- a building, the given asset should be valued at cost minus any accumulated depreciation or at the amount of revaluation, which is the fair value of the asset minus depreciation. Note that in the case of fair value, such must be reliably measured. There should be subsequent revaluations with enough regularity to allow for the carrying amount to be in the whereabo uts of the fair value. Revaluation may bring about a surplus or a deficit and this, according to IAS 16 should be included in the retained earnings. In case of depreciation, the depreciable amount is to be allocated using a systematic way over the useful life of that asset, (in this case the building). (Holt, 2010) (c) After initial recognition, describe the accounting treatment that should be adopted for an investment property in the accounts according to IAS 40? In the process of accounting for property, be it buildings, land or parts of buildings, is to classify such in accordance to IAS 40. If such assets are for capital appreciation or rental purposes as opposed to supply or production of commodities, not intended for disposal or for administration then these should be reclassified from Property, Plant and Equipment to property for investment if such is deemed essential. (Wittsiepe, 2008 p133) An investment property shall be accounted for in the accounts as an asset only under the situation that; there can a reasonable way to

Kant's ethical theory Essay Example | Topics and Well Written Essays - 750 words

Kant's ethical theory - Essay Example Immanuel Kant is the founder of Critical Philosophy, and he is also the Father of Modern Philosophy. By applying the Critical Method to the study of Pure Reason, Practical Reason and Judgement, Kant endeavored himself to the knowledge of Man. His findings provide a wide spectrum of implications in order to establish the frameworks of Absolute Empiricism,Absolute Rationalism and Absolute Idealism In the realm of any ethical theory, there are some standpoints that can be taken, so an ethical system could be Deontological, Teleological, Consequentialist, Relativism/Subjectivism, and Virtue Based Theories. Kant’s ethical theory is purely based on duty, so it is deontological. The uniqueness and originality of his ethical theory springs from the application of the concept of Categorical Imperatives (unconditional) instead of Hypothetical Imperatives (condicional) as the philosophers before Kant used to build their ethical theories, especially in the case of Thomas Aquinas. The Cate gorical Imperatives demand to be universalizable in order to be accepted as valid guidelines for action. The concepts of autonomy and heteronomy along with the principle of treating human beings as ends in themselves, not as means, give rise to valid conclusions about respect for human dignity, freedom in every ethical choice, and the eventual state of peace that can be accomplished with such an ethical system. It lacks the presence of Unconditional Love as Kant tried by all means not to deal with the conflicts that arise out of building an ethical theory based on emotions. But Unconditional Love is much more than an emotion as it can be considered to be a Categorical Principle. 2. Defining how Kant distinguishes between autonomy and heteronomy. Autonomy is the freedom of choice without any external determination, and Kant established that it is necessary for a human act to be considered moral in itself. Heteronomy is the external determination of human acts (for example, God or a motivation based on any kind of reward or punishement) so heteronomy interferes with the freedom of choice of the individual taking away from the agent the capacity of using his/her reason as a whole human being according to the Law of Nature to act in a moral way. The implications of this standpoint about morality are summed up as follows: "If our actions are pre-determined and we merely bounce around like snooker-balls, we cannot be described as free and morality doesn't apply to us. Kant could not prove that we are free - rather, he presumed that we could act morally, and for this to be the case we must be free. He also thought that it followed that there must be a God and life after death, otherwise morality would make no sense." (RSRevision.Com, 2006). 3. Explaining Kant's formulation of the "categorical imperative." A categorical imperative is an unconditional motivation to act morally as a free agent. This concept is very useful from a practical viewpoint since actions guided by a categorical imperative are free from speculations or dogmatic interpretations. That way our actions are morally correct, and they are good in themselves since they are valid for everybody according to the universalization process explained by Kant. Those actions spring from the good will of man since the main motivation is a strong sense of duty. Some of the formulations of the categorical imperative are the following: "Act only on that maxim (intention) whereby at the same time you can will that it shall become a universal law" () "Always act to treat humanity, whether in yourself or in others, as an end in itself, never merely as a means." (Philosopher.Org, no date). 4. Explaining how adherence to the categorical imperative provides for autonomous ethical choice. Whenever we are faced with conflictive choices the categorical i