Understanding check. Task 1. Finish the following sentences with the ending which agrees most closely with the text

Task 1. Finish the following sentences with the ending which agrees most closely with the text.

a. Accounting convention requires that the cost of fixed assets:

I. be matched to the period in which they provide income.

II. be extended over the year when they are bought.

III. be spread over a period greater than their working life.

IV. be written off as a one-time expense.

b. It is not acceptable to measure depreciation as value at purchase
minus present value because:

I. only scrap value can be estimated with any degree of
accuracy.

II. one year is too short a period to calculate loss in value.

III. the conventions of accounting base values of assets on
costs at the time they were purchased.

IV. it is too difficult to estimate current value.

Score: 2

Task 2. Say whether the following statements are true or false according to the text.

I. The cost of an asset is usually written off over a period of time.

II. Depreciation is never calculated on the basis of how much an asset is used.

Score: 2

Task 3. Complete these sentences about obsolescence using only information contained in the text.

I. Obsolescence is one of two reasons why___.

II. Obsolescence can be caused either because______ or because

III. ________ decides how obsolescent a change in fashion for its product makes it.

Score: 3

Task 4. Answer the questions.

1. For which two groups is the choice of depreciation method
particularly important?

2. What is the main feature of the accelerated methods of calculating depreciation?

Score: 2

Total score: 54 points.

UNIT V

Task 1. Remember the meaning of these words and word-combinations:

overseas subsidiary – дочірнє підприємство, яке знахо­дить­ся закордоном

to facilitate – полегшувати

to make up – складати; готувати

acquisition – придбання (розпорядження)

disposal – використання

rate of exchange – обмінний курс (валюти)

exchange gain – курсовий прибуток при обміні валют

tangible – реальний

free hold property – фривольна власність (безумовне право власності на нерухомість)

stocks – запаси (інвентар)

rationalization – удосконалення (виробництва)

convertible bonds – конвертирувані облігації (які можна обміняти на акції)

deferred taxation – оподаткування, яке було відкладене на певний термін

Score: 13

Task 2. Read and translate the text.

Text

Accounting policies
Heading 1

The accounts have been prepared under the historical convention, as modified by the revaluation of certain fixed assets, in compliance with the provisions of the Companies Act 1985 and applicable United Kingdom Accounting Standards.

The Group accounts are the results of the consolidation of the accounts of the Company and its subsidiaries, with appropriate adjustments. No profit and loss account for the Company has been included as allowed by Section 230 of the Companies Act 1985. In order to facilitate the preparation of the Group accounts of most overseas subsidiary undertaking indicated on pages 46 and 47 are made up annually to 31 July. The results of businesses acquired or sold are included in the profit and loss account from the date of acquisition or to the date of disposal.

Foreign currencies

Assets and liabilities in foreign currencies have been translated at the quoted rates of exchange on 31 August 1991. Differences arising on translation of investments in overseas subsidiaries together with exchange gains or losses on related borrowings in foreign currencies are dealt with in reserves. Other exchange differences are reported as part of the trading profit. Profits and losses arising in foreign currencies have been translated at the average rates of exchange for the period from 1 August 1990 to 31 July 1991.

Fixed assets

Profits and losses on the disposal of fixed assets are based on historical cost.

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