Case 2: There had been a group discussion on various aspects related to accounting standards amongst a few fresh graduates. Each graduate had come up with an opinion about the topics that are been discussed below. You are required to review each of the discussion and validate their opinion with required explanation. Also, you need to provide the correct opinion in case you disagree with all the opinions. Each of the given discussion should be commented upon within 75 - 150 words. The question contains 5 discussions. (5 x 2 marks = 10 marks) Discussion 1: Is it mandatory for an entity to present current and non-current assets, and current and non-current liabilities, as separate classification in its balance sheet even if such classification is difficult? Graduate 1 stated that it is not obligatory for the company to do such classification in the situation of difficulty Graduate 2 mentioned that in the situation of difficulty it's not mandatory but otherwise it is. Graduate 3 agreed with the opinion given by Graduate 1 Graduate 4 agreed with the opinion given by Graduate 2 Discussion 2: If the FIFO inventory method was used last period, it should be used for the current and following periods Graduate 1 mentioned that the company can change the method of inventory valuation as per its convenience and it is not necessary to follow the same method each year. Graduate 2 mentioned that for the company should continue to use the same method of inventory valuation as from the previous years as it aids verifiability Graduate 3 stated that use of inventory valuation method is upto the discretion of the management and if the management decides to change then it can do so. Graduate 4 had no opinion on such statement Discussion 3: In the light of the global crisis situation due to Covid 19 there are some basic accounting assumptions / principles that are threatened. So the management needs to consider such threat in preparation of financial statements. Graduate 1 mentioned that monetary unit assumption is threatened as the dollar has become weak Graduate 2 stated that historical cost assumption is threatened as the prices are effected badly in such a situation Graduate 3 opinioned that the biggest threat is to the going concem assumption as such situation can lead to closure of the company Graduate 4 stated that periodicity assumption is threatened as Covid-19 situation is considered to be an abnormal situation and should not be considered to be a part of the financial year Discussion 4: The calculation of the total comprehensive income includes operating income, other comprehensive incomes, extraordinary items and distributions made to the owners. Graduate 1 agreed with such calculation that it includes all the items except for the distributions made to the owners Graduate 2 totally agreed that all the items are included in such calculation Graduate 3 stated that only Operating income and other comprehensive incomes are included for such calculations Graduate 4 mentioned that only operating income is taken for such calculation Discussion 5: Conceptual Framework state various criteria's for recognition and derecognition of an asset or liability. What would you generally understand about derecognition? Graduate 1 stated that for an asset, derecognition normally occurs when the entity loses control of all or part of the recognised asset Graduate 2 mentioned that for a liability, derecognition normally occurs when the entity no longer has a present obligation for all or part of the recognised liability Graduate 3 stated that derecognition is the removal of all or part of a recognised asset or liability from an entity's statement of financial position Graduate 4 stated that he agrees with all the above three statements. Case 2: There had been a group discussion on various aspects related to accounting standards amongst a few fresh graduates. Each graduate had come up with an opinion about the topics that are been discussed below. You are required to review each of the discussion and validate their opinion with required explanation. Also, you need to provide the correct opinion in case you disagree with all the opinions. Each of the given discussion should be commented upon within 75 - 150 words. The question contains 5 discussions. (5 x 2 marks = 10 marks) Discussion 1: Is it mandatory for an entity to present current and non-current assets, and current and non-current liabilities, as separate classification in its balance sheet even if such classification is difficult? Graduate 1 stated that it is not obligatory for the company to do such classification in the situation of difficulty Graduate 2 mentioned that in the situation of difficulty it's not mandatory but otherwise it is. Graduate 3 agreed with the opinion given by Graduate 1 Graduate 4 agreed with the opinion given by Graduate 2 Discussion 2: If the FIFO inventory method was used last period, it should be used for the current and following periods Graduate 1 mentioned that the company can change the method of inventory valuation as per its convenience and it is not necessary to follow the same method each year. Graduate 2 mentioned that for the company should continue to use the same method of inventory valuation as from the previous years as it aids verifiability Graduate 3 stated that use of inventory valuation method is upto the discretion of the management and if the management decides to change then it can do so. Graduate 4 had no opinion on such statement Discussion 3: In the light of the global crisis situation due to Covid 19 there are some basic accounting assumptions / principles that are threatened. So the management needs to consider such threat in preparation of financial statements. Graduate 1 mentioned that monetary unit assumption is threatened as the dollar has become weak Graduate 2 stated that historical cost assumption is threatened as the prices are effected badly in such a situation Graduate 3 opinioned that the biggest threat is to the going concem assumption as such situation can lead to closure of the company Graduate 4 stated that periodicity assumption is threatened as Covid-19 situation is considered to be an abnormal situation and should not be considered to be a part of the financial year Discussion 4: The calculation of the total comprehensive income includes operating income, other comprehensive incomes, extraordinary items and distributions made to the owners. Graduate 1 agreed with such calculation that it includes all the items except for the distributions made to the owners Graduate 2 totally agreed that all the items are included in such calculation Graduate 3 stated that only Operating income and other comprehensive incomes are included for such calculations Graduate 4 mentioned that only operating income is taken for such calculation Discussion 5: Conceptual Framework state various criteria's for recognition and derecognition of an asset or liability. What would you generally understand about derecognition? Graduate 1 stated that for an asset, derecognition normally occurs when the entity loses control of all or part of the recognised asset Graduate 2 mentioned that for a liability, derecognition normally occurs when the entity no longer has a present obligation for all or part of the recognised liability Graduate 3 stated that derecognition is the removal of all or part of a recognised asset or liability from an entity's statement of financial position Graduate 4 stated that he agrees with all the above three statements