Treatment of Accounting Issues Case Study Example | Topics and Well Written Essays - 500 words

Treatment of Accounting Issues - Case Study ExampleIt is strongly advised to you to take a closer look at either issue along with its relevant treatment and feel free to consult me, had you require any further assistance. Marketing and Advertising Expenses According to the International fiscal Reporting Standards, the marketing and advertising expenses should be charged to Income Statements the year which these marketing and advertising expenses incur. In the light of above criteria, the policy adopted by Mr. Julian to expense out 50% of the marketing and advertising expenditures in the profit and loss account while capitalizing the rest of 50% of the expense in the remainder sheet and amortizing over the period of 5 years, seems as a deviation from the IFRS. Since, Mr. Julian is mainly interested in presenting the financial statements more profitable, that is why Mr. Julian has adopted this strategy. In this way, he could have avoided the 50% expenditures incurred the current year which would eventually have increased the profits substantially. Therefore, Mr. Rafael should disregard this policy of Mr. Julian and should see him to rectify the financial statements and charge out the capitalized amount of marketing and advertising expenses for the current year. Slow Moving Inventory The older policy of writing finish the slow moving inventory was a bit conservative approach.