Accounting For Leases And New Proposed Models Essay

Accounting For Leases And New Proposed Models - Essay Example The International Accounting Standards Board calls for a new lease accounting principle that relates to assets and liabilities. This write up proposes criteria to be set for deciding between two interpretations of whether the lease increases or decreases both assets and / or liabilities. SFAS no. 13, which was issued by FASB, was at that time, 2001, showing improvement on the setting of accounting standards for leases. Many write ups on leases followed suit such as 9 FASB amendments, 12 FASB technical bulletins, EITF consensus, 6 FASB interpretations and others. The FASB is continually working to come up with an adjustment to the Statement of Financial Accounting Standards no. 13 (lease) because it has failed to address many questions by many sectors of the accounting, school, business and other companies on the accounting procedures and interpretation of leases. SFAS no 13 states that an asset can be considered a capital lease, where the value of the leased property is included in the balance sheet of the lessee, If the four conditions listed a are met: a) The lease conveys ownership to the lessee at the end of the lease term. b) The lessee has an option to purchase the asset at a bargain price at the end of the lease term. c) The lease term covers 75% or more of the economic life of the asset. d) The present value of the rental payments when using the lessee’s incremental borrowing rate is ninety percent or more of the fair market value of the asset. TWO ALTERNATIVE CONCEPTS OF LEASE ACCOUNTING One of the main points of SFAS 13 is that all lease contracts generate obligations that should be presented in the balance sheet, contrary to what the Financial Accounting Standards Board believes. In fact, SFAS no. 13 states that "a lease that transfers substantially the entire benefits and risks incident to the ownership of property should be accounted for as the acquisition of an asset and the incurrence of an obligation by the lessee and as a sale or financing by the lessor. All other leases should be accounted for as operating leases. (FASB 1976, para. 60)" FASB differs this by saying that not all lease contracts create both a new asset and a new liability. The FASB and G4+1 group have been implementing the FASB standard on lease recording. Companies in Canada, Australia, United Kingdom and New Zealand have also been following the FASB standards. THE CONCEPTUAL FRAMEWORK AND ACCOUNTING FOR LEASES When assessing the generally accepted accounting principles states that accounting information that should be included in the financial statements are those that are submitted on time to the decision makers. These financial statements must also be relevant to the decision making process. Further, the financial statement items should stated in such a way as to permit comparability between two accounting periods or two or more financial entity who are subsidiaries, branches or competitors. Therefore, when rights and obligations are recorded in a lease contract, intangible assets are created. An airline company comes into "existence" when it buys an airplane. According to monsoon, There is a possibility that lessees may record the lease asset in the balance sheet will be boundless because intangible assets cannot be easily estimated. When a bank

Dirct and eMarketing Essay Example | Topics and Well Written Essays - 1000 words

Dirct and eMarketing - Essay Example This connection between good levels of customer service and good levels of customer satisfaction and retention underpins the common association of customer service with keeping, rather than winning, customers. Customer service therefore plays a pivotal role in relationship marketing. Getting this role right, and to a standard of expertise that is superior to that of competitors and sustainable in the longer term, requires an in-depth understanding of the nature and nuance of customer service. Knowing customers means closing the loop between the messages sent to them and the messages they send back. Developments in IT have led to interactive communication tools such as the mobile phones being used to complement less interactive mechanisms such as mail or media advertisements. Growing use of carefully targeted direct mail has characterized this as the age of addressability. "Mobile commerce refers to transactions using a wireless device and data connection that result in the transfer of value in exchange for information, services, or goods. Mobile commerce, facilitated generally by mobile phones, includes services such as banking, payment, and ticketing" (Mobile commerce, 2005). "Some organisations view m-Commerce as merely another e-Commerce channel, those organisations that exploit the m-Commerce channel properly by developing alternative and complementary propositions will be more successful in m-Commerce" (E-Commerce, 2001). For suppliers, building longer-term customer relationships with the help of m-commerce means maintaining a dynamic knowledge of customers' requirements, preferences and expectations. While corner shop managers may be able to retain customer likes and dislikes in their heads, larger organizations need customer relationship management systems which manage data throughout the customer life-cycle, from initial contact, through information exchange and sales, to delivery and post-sales service. "Elsewhere in Asia, subscribers to Hong Kong mobile service Sunday can receive offers from shops as they pass them in the mall"(May, 2001). This interaction is as important with the mobile as with any other communication medium, and outsource its development and operations with minimal provision for information transfer - hence repeating the mistakes often made in the early days of the call centre. As surveys continue to show, advertising products and services with the help of m-commerce is relatively easy; more difficult, but absolutely crucial, is to gather vital customer information, obtain customer feedback, utilize existing knowledge about the customer and exploit the interactive nature to add value though product configuration (Evans, O'Malley, 2004). For instance, "a European-based mobile operator recently had some tickets for a pop concert for sale. Having identified a target audience, specials offers were sent to mobile customers by SMS allowing them to buy tickets at a discounted rate. Within an hour, all the tickets had been sold for approximately $100 each, customer details had been captured, and most customers had given permission for further follow up offers" (E-commerce, 2001). It is apparent that some industries are being restructured as organizations redefine themselves to take advantage of IT-enabled marketing, or are replaced by newcomers which operate