YSSB Health Inc Free Essay, Term Paper and Book Report
Users & Objectives: The bank is the main user of the financial statements because the company needs the financing, while the owners and employees are secondary users. The bank has an objective of contract compliance, requiring YSSB's debt-to-equity ratio to be no higher than 1 to 1. The objective of owners would be performance evaluation and profit maximization in order to become established as the industry leader. Employees would also have a profit maximization objective because their bonuses are based upon net income.
Constraints: Although the company is a private corporation, IFRS is a constraint due to the bank requesting compliance. Since the bank is the main user of the financial statements, their request of YSSB notifying them of any major changes to dividend and profit distribution within the company is another constraint.
Issue #1: Accrual Basis Accounting vs. Cash Basis Accounting
Alternative 1: Continuing the cash basis accounting method.
By using the cash basis of accounting, conservatism is practiced at the expense of delaying revenue recognition. Also, the ma......
Word Count: 1147
Page Count: 4.5 (250 words a page / double spaced)
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