Volume 03 - 2016

Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/12171

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Now showing 1 - 20 of 42

Interest from Inter-Company Loans
(Department of Accountancy, University of Kelaniya, 2016) Gomas, P.H.; Abewardane, D.K.Y.
“B” a recognized conglomerate in Sri Lanka is composed of companies successfully operating in several industry sectors managing businesses in varied markets. Expanding overseas into the international market, B has spread its products and services globally. The group continues to grow through innovative technology, introducing new products that successfully carve themselves a place in the world of consumer demand. B Company spread their business under several sector. Such as manufacturing, healthcare, Leisure and transportation. Their main target is to provide superior most innovative products to their local as well as foreign customers. Subsidiaries are those enterprises controlled by the Company. Control exists when the Company has the power, directly or indirectly to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities.
LKAS 16 and Componentization
(Department of Accountancy, University of Kelaniya, 2016) Gunasekara, T.M.T.D.; Abeywardhana, D.K.Y.
Mega PLC established on the 1st November 1969. It is empowered to generate electrical energy, transmit the same and distribute it to reach all categories of consumers and to collect the revenue. It is the duty of the Mega PLC to make the optimal use of the resources through the application of pragmatic and timetested managerial methods in the power and energy sector of Sri Lanka.
Can We Place Entire Web site Development Cost in One Bucket?
(Department of Accountancy, University of Kelaniya, 2016) Dayananda, K.H.N.K.; Thilakrathne, P.M.C.
NK Logistics (Pvt) Ltd is a limited liability company incorporated in and domiciled in Sri Lanka. The company has invested in a fully owned subsidiary called “TT Destinations (Pvt) Ltd” in the audited financial year, i.e.; 2014/2015. Its’ principal business activity is to provide transportation service. Normally company organizes tourist trips for both local & foreign tourists. In addition they provide vehicle hiring service, air ticket booking and hotel accommodation service. Usually businesses tend to charges all the expenses with regards to web development, especially relatively small businesses like “TT Destinations (Pvt) Ltd”. They always feel that it is justifiable & easy to charge them to P/L. However firms should consider nature of those expenses before record as an expense.
Recognition of the Power Plant as a Non-Current Assets Held for Sale
(Department of Accountancy, University of Kelaniya, 2016) Handunge, T.D.; Abeywardhana, D.K.Y.
XYZ (Pvt) Ltd is Sri Lanka’s first privately owned fabric intensive free trade zone. It is the leader in industrial multi facility connectivity empowering the apparel and fabric manufacturing industry, the best supply chain solution in sustainable industrial eco system. This company provides different types of shared services to other apparel companies as well inside the park and we can categorize these shared services according to five types such as power, water, biological chemical effluent treatment, accommodation and supply chain. This factory was operated earlier by Kaloon Lanka (Pvt) Ltd which was a Korean based company. However in 2006 XYZ (Pvt) Ltd acquired this premises and continue the operations under a 99 years lease agreement with the Board of Investment (BOI). Once they acquired the company, there were different types of assets which were recognized in their new SOFP. These assets are related to the non-current assets, capital working progress and current assets. However if a company does have any intention to sell an asset a set of criteria should be fulfilled according to SLFRS 5-Assets held for sale [Paragraph 2] standard, there after we have to classify that asset as Assets held for sale.
Valuation of Inventory at Selling Price
(Department of Accountancy, University of Kelaniya, 2016) Priyanganie, K.A.I.; Wijesinghe, K.D.G.N.
PQR limited is limited liability Company which is engaging a retail business as a super market with more than 300 Outlets Island wide. It imports and locally purchases groceries, provisions, liquor, house hold items and fruits & vegetables, and distribute to the outlets using 5 warehouses. Normally they conduct a physical stock verification at the end of every financial year of assessment. On that time of stock count, the company value the stock at selling price.
Revenue Recognition of a Related Party Company According to “Transfer Pricing”
(Department of Accountancy, University of Kelaniya, 2016) Thishanthi, G.T.; Kawshalya, M.P.D.
XYZ Developers Group is a group which consists with three BOI registered companies. The businesses of the companies are purchasing lands, constructing apartment buildings and sell them to customers. As the companies are registered under BOI they are in a tax exempted period.
Full impairment of a Property Plant and Equipment Purchased in the Current Financial Year
(Department of Accountancy, University of Kelaniya, 2016) Rajapaksha, S.R.; Silva, N.L.C.
‘LSI Rubbers (PVT) LTD’ is operating as a group of companies, which produces and sells Rubber, Tea, Coconut and Cinnamon. Major portion of its income is recorded to be received from rubber production. A machine has been purchased by the company which causes for about major portion of surgical gloves produced to be recognized as defects.
Recognition of Interest Income in Small Financial Institutions
(Department of Accountancy, University of Kelaniya, 2016) Dharmadasa, P.G.K.H.; Gunasekara, U.L.T.P.
LMD Ltd is a company which provides micro credit in remote areas; however the company does not take deposits. The loan portfolio includes variety of loan categories such as business development, consumption, dairy, etc.
Application of LKAS 16 & LKAS 39
(Department of Accountancy, University of Kelaniya, 2016) Jayasinghe, B.G.W.A.C.W.; Rajapakse, R.M.D.A.P.
PQR Lanka is a non-profit organization in Sri Lanka. The organization was registered in 1995 with the mission and vision to provide assistance and help to those who are living under the poverty line and to help people who were affected by the war in Sri Lanka. This case is relating to an issue of identification criteria of Property, Plant & Equipment.
Recognition of Revenue on Advertising Service
(Department of Accountancy, University of Kelaniya, 2016) Jayarathna, K.G.N.S.; Thilakarathne, C.R.
NSJ (Pvt) Ltd is a Limited liability company which provides the services of printing, publishing, packing and as well as marketing solutions. Company cooperates with different types of industries such as medical, IT & telecommunication, apparel and digital media. NSJ (Pvt) Ltd publishes two monthly magazines in collaboration with a major IT firm and Medical Association. In respect of company’s advertising services in its magazine publications, Company offers three months, six months and twelve months advertising packages, for which company enters into agreements with its customers who wish to get their advertisements published in the company’s monthly magazines, wherein Company agrees to repeat customers’ advertisements over the period as specified in the agreement.
Non-Recognition of Provision for Obligations
(Department of Accountancy, University of Kelaniya, 2016) Sewwanthi, A.V.H.; Kawshalya, M.D.P.
XYZ is a company which is incorporated in implementing many projects in Sri Lanka. Under that there is a project which is engaging in providing credit guarantees to Participating Financial Institutions (PFIs). In this article included an issue related with the Identification of provision separately from contingent liability with the analysis in accordance with the LKAS and provides relevant accounting treatments.
Valuation of Biological Assets
(Department of Accountancy, University of Kelaniya, 2016) Rajapaksha, S.R.; Perera, H.A.P.L.
‘Green Acre Farms PLC’ is a listed company on Colombo Stock Exchange, which has the largest and most modern poultry hatcheries and breeder farms in Sri Lanka. In performing the operations, selective breeding, hatching and sale of commercial day old chicks are provided by the Green Acre Farms (GAF). Following the ruling issued by Institute of Chartered Accountants of Sri Lanka (ICASL), on 2nd March 2012 on bearer Biological Assets, cost basis was used by the company in measuring their biological assets. However, company had to change their policy of measuring the biological assets from cost basis to fair value basis, due to the request by the company’s main investor and the auditors.
Improper Recognition of Foreign Funding for the Stated Capital
(Department of Accountancy, University of Kelaniya, 2016) Maheshika, U.P.W.; Sujeewa, G.M.M.
Royal (Pvt) ltd is a limited liability company, which was incorporated on the 28thof October 2014. This company is a joint venture company, jointly controlled by Royal international company in India and Royal Ltd in Sri Lanka who has 50% ownership equally. The client’s trading is mainly focused on printing of labels and tags. This case is relating to the foreign funding for the share capital and mainly discusses about the implication of the stamp duty act No 43 of 1982, Inland Revenue act No 10 of 2006 and company act No 07 of 2007.
Recognition of Commission on Insurance between Insurance Agent and Insurance Brokerage Company
(Department of Accountancy, University of Kelaniya, 2016) Muanasinghe, G.W.G.I.W.; Rajapakse, R.M.D.A.P.
AF Company is a public limited company incorporated and domiciled in Sri Lanka under the Companies Act No.07 of 2007 and classified under banking & finance industry by Colombo Stock Exchange. During the financial year 2014/15 AF PLC become a parent company of “A Insurance Brokerage Company” by acquiring their associate company as a subsidiary. The company provided a vast range of financial services which included accepting deposits, leasing, hire purchase, loan facilities, pawn brokering and other financial services. This issue is relating to the violation of Insurance Act No 3 of 2011 section 88 that given a maximum rate of commission that might be paid by an Insurance broker to an insurance agent.
Tightening the Internal Controls
(Department of Accountancy, University of Kelaniya, 2016) Mirihagalla, M.K.D.L.; Silva, N.K.L.
XYZ Ltd is a company engages in distribution of pharmaceutical products to pharmacies, groceries, hospitals and doctors. The distribution channel directly operates with credit and cash sales through sales agents and cash collectors. Sales system are mainly operated as credit and cash sales through agents and cash collectors. Collectors are responsible of collecting the cash.
Reinstatement of Fully Depreciated Assets
(Department of Accountancy, University of Kelaniya, 2016) Thilakarathna, P.G.C.M.; Kaushalya, M.P.D.
XYZ Bank is firmly established as a Sri Lanka’s premier financial services organization. Today the Bank’s portfolio of products and services is diverse and comprehensive, to facilitate commercial banking, personal banking, development financing etc. The XYZ Bank now leads in the local banking industry as the biggest in terms of profit, assets, deposits, advances and foreign currency remittance. Most of entities face many issues and questions during the process of accounting for items of property plant and equipment, including determining an asset’s useful life and which depreciation method to employ. With this context, an attempt is made here to examine the accounting treatment with reference to the fully depreciated assets which are still in use in XYZ Bank.
Does it Worth Capitalizing?
(Department of Accountancy, University of Kelaniya, 2016) Chathuri, I.P.D.; Thilakarathne, P.M.C.
ABC Active (Pvt) LTD is a separate legal entity under Active cluster of ABC (Pvt) LTD. ABC (Pvt) LTD is a $1.2 bn conglomerate and is positioned as one of the world’s most recognized Design–to-Delivery Solution Providers in the realm of Apparel and Textile Manufacturing. Being one of the largest production plants in Sri Lanka, ABC Active (Pvt) LTD owns 03 plants of production comprised with Knitting, Dyeing & Sewing production floors. ABC Active involves high technical knitting machines for their vibrant production process. Discrepancy identified here is that management recognizes total expense in the quotation as cost of a knitting machine although the payment of the asset is based on a deferred scheme.
Recognition of Deferred Tax. Case Studies in Accounting “Bridging the Gap"
(Department of Accountancy, University of Kelaniya, 2016) Ifthikar, S.M.; Thilakarathne, C.R.
PQR (Lanka) Limited is a company whose preliminary engagement is to manufacture and sell Paints. It leverages its worldwide experience to deliver products of International quality & assortment to the consumers with complete range of decorative, wood finishes and industrial coatings. When considering about the supply chain of the company, distributors play a vital role which ultimately decide the reachability of products all around the country without any exertion. The rapid change of customer behaviors and innovative technologies led the company to think differently and be wise in the situation where opportunities can explore and execute. Therefore with considering those facts company has been decided to go one step ahead from the manufacturing process on conventional paints. So they introduced “Luxury Paints” as a new product range for the company. Hence dealers need to be attracted to sell new product. Company introduces “Gold Coin Awards” for distributors who achieved more sales on “luxury paints” as a “promotional campaign”. This will be conducted in subsequent financial year based on the performance of current financial year for selected distributors. Since “this is a present obligation and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation”, company has been provided a monthly provision for this gold coin awards.
Recognition of Non-Current Assets
(Department of Accountancy, University of Kelaniya, 2016) Nawaneliya, M.M.A.E.; Wijesinghe, K.D.G.N.
ABC (Pvt) Ltd. is a member of PQR Group which can be categorized under Service industry. ABC (Pvt) Ltd. offers civil construction, mechanical engineering, electrical engineering and other specialized engineering services. Company has a separate section which is called as CNC Mold section. It has a large CNC Mold Machine with the special Steel floor and high power supply Transformer. The company considered steel floor and transformer are components of the CNC machine and the company Statement of Financial Position has shown the cost of machine with the cost of steel floor and high power supply Transformer.
Intended Manipulation of Share Prices
(Department of Accountancy, University of Kelaniya, 2016) Nanayakakra, D.D.; Sujeewa, G.M.M.
XYZ Limited is a Limited Liability Company incorporated & domiciled in Sri Lanka under the companies Act no.07 of 2007. XYZ Limited is a fully owned subsidiary of PQR Limited. ABC Ltd is a subsidiary of the XYZ Ltd which located in same business place & governed by same directors. The principal activity of the company is providing intermediary and advisory services on financial, investments and other corporate activities and Asset Management services. The company had an investment of Rs. 62 Million in KLM PLC shares (one of their related company incorporated in Maldives). This investment was valued at active market price of 10 Maldives Rufiyaa each. In further inquiries it was noted that the active market has been manipulated by parties within the group with the intention of recording a gain from those shares and to make the company visible as a profit making body to the interested parties of its financials.