IAS16

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WorldCom - "I falsified the financial statements of the company... for the purpose of meeting analyst expectations" Scott Sullivan CFO of WorldCom. WorldCom capitalised expenditure in order to make earnings appear greater.  IAS 16 prescribes the accounting treatments for property, plant and equipment where the principal issues are the recognition of assets, the determination of their carrying value and the depreciation and impairment charges recognised in relation to them. *Income statements should show the current years depreciation as an expense, and balance sheets should show the accumulated depreciation as a reduction of cost. *Carrying amount - the amount an asset is recognised at after deducting any accumulated depreciation or accumulated impairment.  *Residual value - the estimated amount an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were of the age and condition…

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