Valuable Factors and Analysis On Financialâ€Myassignmenthelp.Com

Question: Valuable Factors and Analysis On Financial? Answer: Introduction This report consists of all the legal facts and figures such as accounting laws, financial implication and penalties and charges imposed on Deep water Horizon Oil Spill for the strictly proven liabilities. The main discussion in this report is consisted of damages observed due to deep water Horizon Oil Spill and how organization is coming up with strategies to replace its existing eco-safety machines. In this report, it is given that group has maintained escrow account to meet their contingent liabilities. This escrow accountant has been made maintained as per the legal and regulatory requirements. This case provides a clear bifurcation on the fines and penalties which are imposed on the Deep water Horizon Oil Spill and those liabilities which are uncertain for the legal fines. In addition to this, this report reflects the direct and indirect impact of ecological and sociological services in and around the Gulf of Mexico. This Deep water Horizon Oil Spill has forced government and re gulatory authorities to makes changes in mandatory requirement of ecological and sociological services used by all the organizations in Mexico. There are several discussion and recommendation given which reflects the true impact of Deep water Horizon Oil Spill (Boyd, 2010). Points of discussion The main discussion has been made on the negative impact of Deep water Horizon Oil Spill which has occurred due to the less effective ecosystem implemented by BP. This Deep water Horizon oil spill provides a clear bifurcation on the fines and penalties which are imposed on the Deep water Horizon Oil Spill and those liabilities which are uncertain for the legal fines. After analyzing all the details and points in this case study, it is observed that BP did not disclose the proper information on eco-system services and other environmental support system which could be used by company to mitigate the negative impact of its business functioning. However, BP had also implemented new eco-system which was no use and did not put any positive responses. Deep water Horizon Oil Spill had put negative impact on the financial positions of the company. It is observed that in 2009 BP was having profit of around $ million 6947 which decreased by very drastic amount and company had to face high amoun t of loss of $ million 11071. In addition to this, BP had promised to make contribution of $ 500 million in its research and development department in order to develop an effective level of eco-system after analyzing the negative impact of Deep water Horizon Oil Spill. In addition to this, in order to strengthen its destructive brand image, The BP group had also committed to provide fund $ million 360 cost of Six berms in Louisiana island project. The main discussion point is related to the amount of money which BP invested in the development of Eco-system. Company charged this amount from profit and loss account by considering its revenue expenses. As per the IFRS rules and regulation, the investment made in establishment of eco-system is capital expenditure. Company has charged these expenses from profit and loss account (King, et al. 2015). This reflects that company has not been following proper accounting and financial regulatory requirements. This has shown that company had be en making several positive plans and strategies in order to mitigate the negative impacts arouse in Mexico gulf. However, as per the accounting and regulatory requirements, it is analyzed that BP had put all its required and promised funds in its escrow account. This escrow account was maintained with a view to keep penalties money and uncertain charges which could be aroused if all the imposed charges proved to be strict liabilities under the clean water act. In addition to this, consolidated financial statement and annual report had been prepared by BP in order to comply with IFRS rules AASB standards. Further to notice, BP has also shown amount of loss which it suffered from Deep water Horizon Oil Spill in its consolidated balance sheet for complying with its domestic and international regulatory requirements. Moreover, it is considered that the total value of eco-system which had destroyed due to oil spill would cost around USD 12 to 47 billion. The main concern in this report r elated to the transparency of BP working system. Company had failed to disclose required amount of information to its domestic and international stakeholders. BP had neither followed international nor domestic reporting frameworks properly. If company wants to maintain an international brand image then it should comply with IFRS rules and AASB accounting standard while reporting its consolidated financial statements with regulatory authorities (Bodle, et al. 2016) Reflection on the case of BP In this case, BP had faced several penalties and charges due to its Deep water Horizon Oil Spill. These expenses company has charged as revenue expenses from its profit and loss account. On the other hand, as per IFRS and AASB 137 standards if company has made expenses and investment which is high in amount and related to capital expenditure then it should be charged as Capital expenditure. BP has charged all its losses from the profit and losses which reflects high amount of losses in its business functioning. Perhaps, BP had accounted these transactions as revenue expenditure with a view to save tax from the governments. It is evaluated that BP had to make proper disclosure of all its financial transactions to its stakeholders. BP had failed to make proper level of disclosure to its stakeholders which had made company in default complying with its accounting and financial regulatory requirements. It is observed that BP did not disclose the proper information on eco-system services and other environmental support system which could be used by company to mitigate the negative impact of its business functioning. Deep water Horizon Oil Spill had resulted into negative impact on the financial positions of the company (Zhuang, 2016). It is observed that company has lost its economic value and in 2009 BP was having profit of around $ million 6947 which decreased by very drastic amount and company had to face high amount of loss of $ million 11071. Therefore, it would be inferred that BP has not followed proper level of compliance and disclosure requirements. In addition to this, less effective business functioning of BP has resulted into high level of losses. With a view to conclude the point of view on this subject matter it is reflected that BP needs to make changes in its reporting frameworks and should work on its transparency issues in determined approach (Gutierrez, et al. 2013). Conclusion This report reflects the shortcoming of BP in its accounting and financial regulatory requirements. There above study on Deep water Horizon Oil Spill has been analyzed which has provided how management department had come up with financial implication of BPs responses to Deep water Horizon Oil Spill. In addition to this, there are other shortcoming have been disclosed which BP had made in its financial reporting. Stakeholders had made claim that company did not disclose proper information in its annual report. Accountant of BP had charged all of its expenses as revenue expenses. In addition to this, the company has suffered losses due to its negative business functioning. If BP wants to recreate its brand image then it will have to pay off its all charges and establish an effective eco-system. Now in the end it would be inferred that accountant and financial managers need to analysis all IFRS rules and accounting standards in determined approach before preparing financial statement o f BP. Moreover, after the Deep water Horizon Oil case, government and regulatory authorities should make changes in mandatory requirement of ecological and sociological services used by all the organizations in Mexico. This would not only increase the health safety requirements but also increase the transparency in discloser of financial and accounting details to its stakeholders (Liu, et al. 2016). References Bodle, K.A., Bodle, K.A., Cybinski, P.J., Cybinski, P.J., Monem, R. and Monem, R., 2016. Effect of IFRS adoption on financial reporting quality: Evidence from bankruptcy prediction. Accounting Research Journal,29(3), pp.292-312. Boyd, J., 2010. Lost ecosystem goods and services as a measure of marine oil pollution damages. Resources for the Future DP 10-31, 25p Gutierrez, T., Singleton, D.R., Berry, D., Yang, T., Aitken, M.D. and Teske, A., 2013. Hydrocarbon-degrading bacteria enriched by the Deepwater Horizon oil spill identified by cultivation and DNA-SIP. The ISME journal, 7(11), p.2091. King, G.M., Kostka, J.E., Hazen, T.C. and Sobecky, P.A., 2015. Microbial responses to the Deepwater Horizon oil spill: from coastal wetlands to the deep sea. Annual review of marine science, 7, pp.377-401. Liu, Z., Liu, J., Gardner, W.S., Shank, G.C. and Ostrom, N.E., 2016. The impact of Deepwater Horizon oil spill on petroleum hydrocarbons in surface waters of the northern Gulf of Mexico. Deep Sea Research Part II: Topical Studies in Oceanography, 129, pp.292-300. Zhuang, Z., 2016. Discussion of An evaluation of asset impairments by Australian firms and whether they were impacted by AASB 136.Accounting Finance,56(1), pp.289-294.