ASSIGNMENT IS DUE SUNDAY OCTOBER 23RD 2016 AT 8 AM – PLEASE BE ON TIME
FOR TOM MUTUNGA ONLY
Wed Oct 19, 2016 at 9:27 pm
Kasey has a decision to make on how to classify these bonds, but the decision is quite simple since the company does not intend to hold the bonds for the full five years. Per the FASB (1993), Kasey should classify them as AFS due to the following passage:
An enterprise shall not classify a debt security as held-to-maturity if the enterprise has the intent to hold the security for only an indefinite period. Consequently, a debt security should not, for example, be classified as held-to-maturity if the enterprise anticipates that the security would be available to be sold in response to:
a. Changes in market interest rates and related changes in the security's prepayment risk
This short piece from FAS 115 perfectly describes the circumstances that Kasey is faced with. Wholemart does not intend to hold the securities for the full five years and are reacting to the fact that interest rates have risen.
By recording the bonds as HTM, Wholemart would be losing out on the FMV of the bonds due to the rise in interest rates. That said, the interest revenue received by classifying as HTM would increase the net income whereas classifying as AFS would not increase the net income until the security is sold. Only once the security is sold will the net income be affected when classified as AFS (it is reported as an unrealized gain on the equity section of the balance sheet). While her bonus for the current year will be immediately affected if classified as HTM, it (potentially) would be smaller than if she were to classify the bonds as AFS and realize the FMV gains upon sale the following year.
As controller, one would assume that Kasey is the authoritative figure on how to classify the securities with the input from the companies officers as it pertains to each individual investment. For our example, if Kasey knows for certain that the bonds will not be held until maturity, then she has an ethical obligation to record them as AFS despite what pressures might be coming her way. Without the intent to hold the bonds for the full five years, this is an easy decision.
Today at 3:01 pm
Let’s first discuss the 3 types of classification methods of debt security before moving on to the decision that Kasey should make in this situation. They include 1. Trading securities, 2. Available for sale securities, and 3. Held to maturity security.
__MCE_ITEM____MCE_ITEM__1. Trading securities are kept by companies that plan to buy and sell for short term profit, they are reported at their fair market value. On the income statement they affect the income as profits or losses.
__MCE_ITEM____MCE_ITEM__2. Available for sale securities are similar to trading securities with the only difference being the accounting part. For trading securities the changes in value are recorded in operating income, whereas for available for sale securities the changes in value go into a special account, called “unrealized gain/loss in other comprehensive income”, which is in the stockholder’s equity.
__MCE_ITEM____MCE_ITEM__3. Held to Maturity securities are securities held by a company that it intends to buy and hold on to until maturity and are recorded at cost. Gains and losses are only recognized after the securities are sold.
Kasey’s bonus should have no effect on the classification of securities, and since Kasey’s company’s debt security is for long term she needs to choose between available for sale and held to maturity, classifying the securities as held to maturity would cause net income to increase after the securities are sold. However because of an oversight from the company and due to rising interest rates the company doesn’t intend to hold the bonds for 5 years and classifying the securities as held to maturity would be a bad decision since the company would only lose more so in this case the classification Kasey should use is Available for sale securities.
Sun Oct 16, 2016 at 11:59 am
Authentic leaders should remain authentic to their personal beliefs while at the same time adapt to different cultural environments. Authentic leaders must also learn how to read social ques, and act appropriately when issues come up. They must also not tolerate unethical or immoral behavior from others (Vogelgesang, Clapp-Smith, & Palmer, 2009). In my workplace, I have seen leaders get to know individuals who are from different cultures, as well as be more sensitive to their beliefs that are different or out of the norm. Personally, I am trying to do the same, an always keep in mind that diversity is good and a diverse workplace is one that is usually more successful and have more ideas.
Mon Oct 17, 2016 at 12:36 pm
“Culture is defined as the shared traditions, beliefs, customs, history, folklore, and institutions of a group of people. Culture is shared by people of the same ethnicity, language, nationality, or religion.” (Building Culturally Competent Organizations. 2016).
By using the term cultural sensitivity we are referring to “knowing that differences exist between cultures, but not assigning values to the differences (better or worse, right or wrong). Clashes on this point can easily occur, especially if a custom or belief in question goes against the idea of multiculturalism.” (2016) Peoples cultural background that is not the same as yours.
Within our organization we are:
Building on the strengths and resources of each culture in an organization, knowing how to utilize their knowledge and skills which may be different.
Trying to understand how each of our backgrounds affects our responses to the end goal and how we get there.
Eliminating prejudice in policies and practices; documentation for leadership and staff development in the area of cultural awareness, sensitivity, and understanding.
Identifying barriers and how we as an organization get over them
Being more familiar within the neighborhoods which are predominantly of a different culture.
Q: As the healthcare system prepares to select an outsource company as its vendor for this project, what types of information should it give to and gather from each vendor under consideration?
A: Based on my experience selecting EHR vendors, one of the important information a healthcare organization needs to acquire from the vendor is the system limitation. What can and can`t this EHR system do? Can it post complete diagnostic results, including images? Or is it only able to post the reading results? Can the system be modified per the organization`s preference or not? System feasibility is another important information that needs to be acquired. Once the organization know how much the system can potentially cost, then they can refer to their own budget to see if it is something the organization can afford or not. System warranty is another factor that needs to be considered,
Q: What are the potential benefits a healthcare system could gain from implementing a document imaging and management project prior to implementing an EHR system?
A: A healthcare system implementing a document imaging and management project prior to EHR could benefit from less paper. Paper records require storage and can depending upon the amount of patients a practice might have it can be easy to lose records or spend extra time trying to search for a patients record (Terry, 2007). In addition, a document image and management project would have also made it easier for practices to transition over the EHRs. The records would have already been scanned into the system which would have saved the practice both time and money.