Why Do U Want To Work At Vans'

The calculation of equity Net trade: economic impact

In different occasions we have addressed the different views of equity (accounting and business) and their impact statements in certain corporate operations now in this post we focus on the economic effects of accounting other (a term used by Cañibano teachers and Herranz ) in an excellent article that partially collect below.

The English PGC (together with the Circular of the Bank of Spain and other English legislation applicable) is mandatory by all English companies in the development of its financial statements, which are to be taken into consideration when proposing dividends and make other regulated mercantile operations or calculations.

Also, while the PGC is based on IASB standards adopted by the EU, is not entirely coincident with them. This differentiation Conceptually, it could be aimed at one of two objectives: Adapting

• tax regulations to facilitate the work of small businesses, major targets of the PGC itself, avoiding having to implement more complex rules directly from the IASB, or
• Adjusting to trade policy.

The first conceptual alternative (adjustment to the tax) should be excluded from the time when the PGC is applicable to all types of societies, not just small. However, the second alternative (though not recommended) if that could have been adopted. Since PGC is emitting a totally mismatched with the rules IASB approved by the EU, could have been defined according to the English corporate legislation, but has not been the case.

Indeed, the English mercantile law establishes certain criteria for measuring mismatched with the PGC . A basic example is found in the measurement of equity purposes of determining capital mandatory reductions or compulsory dissolution company.

To this end, the net assets shown in the separate financial statements prepared in accordance with the PGC should be added certain items:

not required
1. Social Capital, which appears in the balance remaining on equity;
2. equity loans, which appear as liabilities on the balance sheet Capital
3. shaped stand, which appears as such in balance, and
4. Impairment of real estate investments and other assets, subtracting displayed in the income statement.

latter concept, incorporated by Royal Decree in late 2008, on a temporary basis for 2008 and 2009, has been renewed for another two years in April 2010.

can easily observe the importance of this calculation in the current situation. Perhaps the c net worth ALCULATION commercial purposes may have more importance for some companies that own accounting . For example, a company may be broken on its balance sheet, made according to the PGC, having assets of less than its liabilities and not have to be dissolved if, applying the calculation of equity trading, fulfills the conditions. Is an example of another accounting .

The novelty soon pointed out, not computing related impairment losses on fixed assets to determine the calculation of equity trading, has a clear economic impact. Although have defined this special time with good intentions to avoid bankruptcy of some companies, it is possible that its ultimate economic effects are not exactly the most beneficial for the English general. Create a minor grievance with the companies that have sold the property at a price that the market has been able to absorb, because they can not refinance their promotions or any other cause.

Consider the two behaviors:

• The company gets refinancing, sell their property but that deteriorates, but such damage is not counted for purposes of possible commercial implications. Society does not
• refinance their properties, because they do not want or can not, and sell their properties at a reduced price.

In the first case prevents the normal functioning of the market, there is no any taxes for state coffers, using funding that could be partially applied to the final consumer, reducing the additional economic activity that would occur with real estate sales for final use (small construction and renovation of masonry, plumbing, carpentry, painting, etc.) usually carried out by small businesses and self, physically deteriorated buildings or, alternatively, there are additional costs maintenance and custody, etc. Consequences: reduced economic activity, assumption of risk banks refinancing direct and indirect risk added by the disappearance of small businesses and rising unemployment, with its knock-on effects on other possible defaults on financial commitments.

society has chosen to sell at lower prices has produced the opposite effect. The transactions have resulted in taxes levied by government. The lower refinancing allows some liquidity to fund the final user of the property, generally, except in critical situations to which we should not get is usually more compliant than their own promoters. Subsequent reforms to the acquisition by an end user, encourage economic activity and minimize the loss of small businesses and increasing unemployment.

What is the behavior that the regulations should be encouraged to benefit the economy in the long term?

Related Entries:

• Maintenance (normative) equity imbalance (vs social capital. Equity)