Memo on Earthquake Essay Example | Topics and Well Written Essays - 750 words

Memo on Earthquake - Essay Example Option #1 is to report it as an extraordinary loss separate from operations. And Option #2 is to report the loss in a continuing operation but treat it as a separate part in the income statement. These two options would require proper disclosure in our footnotes of the event. The reporting of extraordinary items (losses) has an advantage, that is, they are not included under normal operating income which will be construed by stakeholders and creditors as items that will not happen in the foreseeable future. Hence, the event’s effects on net income are not in any way reflects the true status of the business operation since it is not a recurring event. According to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 225-20-45-2 â€Å"extraordinary items are events and transactions that are distinguished by their unusual and by infrequency of their occurrence. Thus, both of the following criteria should be met to classify an event or transaction a s an extraordinary item†. CHHS has to decide whether the earthquake meets both criteria. Per FASB ASC 225-20-55-2 â€Å"An event or transaction of a type that occurs frequently in the environment in which the entity operates cannot, by definition, be considered as extraordinary, regardless of its financial effect.† On the other hand per FASB ASC 225-20-55-1 stated that â€Å"unusual nature is not established by the fact that an event or transaction is beyond the control of management†. Statistics gathered from Northern California Earthquake Data Center (NCEDC) showed that since 1969, there were about 99 earthquakes that shook the Bay Area with magnitudes of 5 or greater but only 3 have so far been recorded more than 6.7. With these statistics, it may be difficult to validate that earthquakes are infrequent and of a kind that would not be projected to happen in the foreseeable future. Should we were to report the damage as an extraordinary item; it will appear und er continuing operations as the net-of-tax of $16.5 million. Per FASB ASC 225-20-50-3 states that â€Å"The nature and financial effects of each event or transaction that is unusual in nature or occurs infrequently, but not both, shall be disclosed on the face of the income statement or, alternatively, in notes to the financial statements.† We can use this statement as our basis â€Å"to report losses under continuing operations but as separate component† according to Accounting Principles Board (APB) Opinion 30 paragraph 26. Under this reporting method, stakeholders and creditors are prone to analyze that there is still a risk that an earthquake will happen again, but the chance is little. Should we report the damage under this option, we would include the full $27.5 million loss as a separate component in continuing operations. Stakeholders and creditors rely on the income statement very much, their decision is dependent on the report we will submit. I am therefore r ecommending Option #2, that is, to report the earthquake damages under continuing operations but as a separate income statement component. Our stores are conspicuously located in the Pacific Ring of Fire, an earthquake-prone area, thus should not be included as extraordinary items. By reporting the earthquake damages as a separate component under continuing operations, we will be following the guidelines prescribed by FASB

How personality and individual differences effect on motivation Essay

How personality and individual differences effect on motivation - Essay Example The paper tells that personality refers to those characteristics of the person that account for consistent patterns of feelings, thinking, and behaving. When it comes to an organisational environment, there are a large variety of people who can be distinguished on the basis of their personality and behaviour. Pervin, Cervone and John further explained their definition by saying that differences in these personality traits impact the organisational behaviour and employee motivation. Personality can be treated as a guiding factor of any individual. In fact, individual differences are referred to variations in personality as well as ability. It is the difference in individual personalities that give way to the job of a psychologist whose main task is to identify the exceptionality in individuals. In general, when the thought of a person’s personality traits, the questions that come up are why some are talkative while others speak less, why some are too joyful while others are ver y reserved and so on. These variations are termed as individual differences in psychology. Individual differences in people can be classified on the basis of two factors: the genetic framework of an individual and the situational factors around him. The genetic framework refers to the characteristic features an individual possess from their ancestors. In other words, it refers to the qualities of nature that a person is born with. On the other hand, the situational factors deal with the environment in which a creature operates.