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1)Some accountants have said that politicization in the development and acceptance of International Financial Reporting Standards (IFRS) is taking place

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1)Some accountants have said that politicization in the development and acceptance of International Financial Reporting Standards (IFRS) is taking place. Some use the term “politicization” in a narrow sense to mean the influence by governmental agencies, such as the European Union and the U.S. Securities and Exchange Commission, on the development of IFRS. Others use it more broadly to mean the compromise that results when the bodies responsible for developing IFRS are pressured by interest groups, businesses through their various organizations, financial analysts, bankers, lawyers, academics, auditors, and so on.

Instructions

1. What arguments can be raised to support the “politicization” of accounting rule-making?
2. What arguments can be raised against the “politicization” of accounting rule-making?

2)Using the following information, and a 360-year. Calculate the accounts receivable period, accounts payable period, inventory period, and cash conversion cycle for the following firm: Income statement data: Sales 5,000 Cost of goods sold 4,200 Balance sheet data: Beginning of Year End of Year Inventory 500 600 Accounts receivable 100 120 Accounts payable 250 290

3)You are considering investing in JouJou Ltd, a public company that manufactures bottle openers and other kitchen tools. In considering purchasing shares in JouJou Ltd, you are utilising your valuation skills to see if the market price is fair. Using the information below, find the theoretical value of one share of JouJou Ltd and compare it to the current market price of $42.53: ? A dividend was paid out yesterday of $0.50; ? The next dividend of $0.50 is expected to occur in two years’ time, and this dividend will be constantly paid every six months for 6 consecutive dividend payments (this includes the dividend at year 2); ? Thereafter, dividends will grow at 6% p.a. compounded semi?annually in perpetuity; and, ? The required rate of return on equity is 8% p.a. compounded quarterly and all dividends are paid out semi?annually. Would you purchase JouJou Ltd? In providing your decision, you may need to state some assumptions that allow you to compare the market value with the calculated share price.  

4)Now, indicate which of the scenarios below are expected to increase a company's cash flow. Check all that apply. Sell some old equipment Pay preferred stock dividends Increase inventory holdings Buy property for a future factory Issue shares of common stock