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N R V ??? which price is to be taken??
11-03-2003, 07:41 PM
Post: #16
 
Hi Zubair!

Some final thoughts on this topic. I think it is the right and a privilage of a practioner to interpret the laws and standards relating to his domain. Accountants, lawyers, and others do it on a daily basis. This process of interpretation is influenced by our level of education, experience and proficiency in the language (if u ask me to interpret Latin Laws, i will be a dud there). Therefore, it is a subjective process. So everyone is entitle to apply the standards his/her own way.
However, whether you reached a right professional judgement or not is for outside institutes to decide. Govt. Depts(Tax, IRS etc), peer review programs (quality control regime), and finally courts play that part. The prime reason for existence of courts is that different pple have different interpretations of laws. Then courts decide which one is correct.

Therefore, i see nothing wrong in applying your own way to analyse a problem. Also i have no problem if others disagree with the conclusions i reach at the end of this process. My only requirement is that they have convincing argument in favour of their positions.

As for keeping the cool is concerned, at the level that we are discussing issues, there is no place for irrational or emotional behaviour. It doesn't cut it in this league. Here only a good argument rules.

Take Care and happy Ramzan!



Edited by - Pervez on Nov 03 2003 24429 PM
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11-03-2003, 10:03 PM
Post: #17
 
Agreed Pervez and Zubair,
thanx for your nice contribution on the topic.
for zubair. <BLOCKQUOTE id=quote><font size=1 face="Verdana" id=quote>quote<hr height=1 noshade id=quote> try discussing this with him and draw his attention to your views and see what does he say.<hr height=1 noshade id=quote></BLOCKQUOTE id=quote></font id=quote><font face="Verdana" size=2 id=quote>
I have already discussed with my auditor and when i found no way out then i acted as said by the auditor. <img src=icon_smile.gif border=0 align=middle>

S M R
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11-03-2003, 10:53 PM
Post: #18
 
Once my teacher in Punjab University Lahore said

Rule 1.... The boss is always right
Rule 2.... If you think the boss is wrong, see rule 1.


I think you would not mind if I amend the above to
Rule 1.... The auditor is always right.
Rule 2.... If you think that the auditor is wrong, see rule 1.

Thanks
zubair
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11-04-2003, 06:47 AM
Post: #19
 
Nice zubair,
oooooh Punjab University, the golden days of my life,
sitting beside the "Nehar", Smoking overthere, trapping someone (Murgha) for lunch and tea and every day we used to throw one of our friends in the Nehar <img src=icon_smile_big.gif border=0 align=middle>
Hiding the Keys of someone's bike and returning these after a small dawat from him.
i really miss the golden days of Hailay College



S M R
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11-06-2003, 05:56 AM
Post: #20
 
HI SMR

When did you go to Hailey College,,,

I went to IBA, which is next to Hailey. you are right yaar,,, Golden days of the life,,,,,

were you in the hostel if so which one...

Zubair
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11-06-2003, 06:04 AM
Post: #21
 
<BLOCKQUOTE id=quote><font size=1 face="Verdana, Tahoma, Arial" id=quote>quote<hr height=1 noshade id=quote>
trapping someone (Murgha)
<hr height=1 noshade id=quote></BLOCKQUOTE id=quote></font id=quote><font face="Verdana, Tahoma, Arial" size=2 id=quote>

Did you mean to write Murghbi or chicken.

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zubair
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11-06-2003, 07:50 PM
Post: #22
 
I was in Hostel no.1, but i shifted to a rented house due to some political groups in PU, i hope u understand that group. bcaz we were facing difficulty to study in the hostel,
and by murgha I mean, the person who is victim of lunch or dinner. <img src=icon_smile.gif border=0 align=middle>

S M R
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11-11-2003, 05:18 PM
Post: #23
 
Asalam o alaikum
But arent we going to value the closing stock (the 1000 metric giga super tones) at the closing rates, i.e. determine the NRV at the year end (which is usually the most recent price) and not the financial statement issue date ????????
or am I trying to act 'the king is naked?' (hope not)
one rationale I can give for this is that there is some degree of possibility to make the financial date more flexible to use and to use it to your possible benefits (of coure you cant control the prices but you can anticipate them for sure)

Me rulz
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11-11-2003, 06:37 PM
Post: #24
 
No Paki, the most recent price refers to the date closer to the intialling date of the financial statements. and this is covered in IAS 10 "Events after b/s date"


S M R
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11-20-2003, 01:04 AM
Post: #25
 
thanks raza for making me go through IAS - 10; been some time.
After a casual reading (so that I still maybe mistaken and so u can still correct me) I found what I thought you referred to in this IAS - 10; its an example (one of the examples) in the earlier paras of the IAS 10 (perhaps it was 9th para). It read some thing like taht "sale price after the balance sheet date maybe indicative of the realizable values of assets, like stocks" and in which case it is going to be an adjusting event (provided change in NRV based on after balance sheet date causes any change)
but you have said that
<BLOCKQUOTE id=quote><font size=1 face="Verdana, Tahoma, Arial" id=quote>quote<hr height=1 noshade id=quote>the most recent price refers to the date closer to the intialling date of the financial statements. and this is covered in IAS 10 "Events after b/s date" <hr height=1 noshade id=quote></BLOCKQUOTE id=quote></font id=quote><font face="Verdana, Tahoma, Arial" size=2 id=quote>

now I cant see in this IAS how it requires us to use a price as a measure on the balance sheet date just because this price prevails on a date that is closer to the date of financial statements????

In my opinion the above referred line of IAS only implies that "in cases" it may be appropriate to estimate the selling price that prevailed on the balance sheet date on the basis of a selling price that prevailed after the balance sheet date (which must be a not so far away date in my reckoning)

so if your date of financial statement is Aug. 15 and yr. end June 30. then you wont use the price of Aug 15 to calculate the NRV at june 30, u might however use the price at July 12 for the purpose, provided its the closest and so on (it realy becomes a matter of judgement once its clear that its not a rule of thumb (or IAS) to use the price prevailing at the FS date)
thanks

Me rulz
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11-21-2003, 12:33 AM
Post: #26
 
Hi Paki,
I was talking about the adjusting events after the balance sheet date, as per IAS 10, the receipt of information after the balcne sheet date indicating that an asset was impaired at the b/s date, or that the amount of previously recognised impairment loss for that asset needs to be ajusted,
e.g. the sale of inventories after the balance sheet date may give evidence about their NRV at the balance sheet,
in view of above, if u have got the evidence that prices are increasing day by day of your inventory then you have to adjust the effect of same in the financial statements,
I m not disagreeing you on any matter, but i m trying to explain my understanding on that,
what do u think, it will be more useful for the users of the financial statements if the company has accounted for events after the balance sheet date.
as you know, if the company shows profits for the year ending 30 june, 2003, and this profit is announced by the company may not increase the share prices if there is evidence that the company is going to suffer the loss in near future due the fall in prices of the company's product.

SMR
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11-27-2003, 07:12 PM
Post: #27
 
arey chanda
<BLOCKQUOTE id=quote><font size=1 face="Verdana, Tahoma, Arial" id=quote>quote<hr height=1 noshade id=quote>the receipt of information after the balcne sheet date indicating that an asset was impaired at the b/s date, or that the amount of previously recognised impairment loss for that asset needs to be ajusted,
<hr height=1 noshade id=quote></BLOCKQUOTE id=quote></font id=quote><font face="Verdana, Tahoma, Arial" size=2 id=quote>
you are right here, because if AFTER the BS date if u know that ON the BS date the situation was actually like this, then you will adjust it.but that the to the good of the
now compare your above statement with the one below
<BLOCKQUOTE id=quote><font size=1 face="Verdana, Tahoma, Arial" id=quote>quote<hr height=1 noshade id=quote>if u have got the evidence that prices are increasing day by day of your inventory then you have to adjust the effect of same in the financial statements,
<hr height=1 noshade id=quote></BLOCKQUOTE id=quote></font id=quote><font face="Verdana, Tahoma, Arial" size=2 id=quote>
DAY BY DAY increase does not mean that a particular thing existed AT the BS date???? so at most what it can be is a non adjusting event needing disclosure.
and I wont change the disclosure of things that existed on the BS date just to let the users anticipate the share prices??? like above, I can at most give an additional disclosure.
To further illustrate
if on June 30, the NRV of stock is Rs. 100 per unit, and July 01, it is Rs. 5 then BS will show Rs. 100 and that fact that prices have deteriorated may be additionaly disclosed.
Further
you have a plant that is only used by you in the market and at June 30 it was recorded at Rs. 1000, on Aug 15 you sell the plant for Rs. 50, now this might need impairment adjustment at BS date, cause there was no active market for the plant so u didnt have the evidence as to its realizable value (and you thougth that its value in use was sufficient) but now that its been disposed off you have the evidence that it was impaired on June 30.that the

Me rulz
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11-29-2003, 10:18 PM
Post: #28
 
sorry guys I have not been following this conversation. May I ask a quickie,,,, do we disagree on the principle or the application of standards?

Thanks

zubair
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04-25-2004, 03:17 AM
Post: #29
 
I DON'T UNDERSTAND WHAT IS NRV? WHAT IS THE SIMPLE DEFINITION OF NRV??

JAVAID
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04-26-2004, 06:12 PM
Post: #30
 
NRV = Net Realizable Value.
NRV is the estimated selling price in the ordinary course of business less any cost which is necessary to be incurred in order to make the sale (eg. marketing expenses).

SMR
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