BangChak and Esso Essay Example | Topics and Well Written Essays - 2000 words

BangChak and Esso - Essay Example Both companies have prepared their financial statements in accordance with Thai Financial Reporting Standards (Bangchak Annual Report 2013, 2014; Esso Annual Report 2013, 2014). Furthermore, the company’s disclosures are prepared using guidelines provided by the Federation of Accounting Professions and the Thai Securities Exchange Commission. Both companies prepare its financial statements on a consolidated basis. The company adopted changes in TFRS related to Income taxes, Foreign Currency Translation and Operating Segments for preparing its financial statements for the year 2013 (Bangchak Annual Report 2013, 2014; Esso Annual Report 2013, 2014). The company uses historical cost accounting method for recording values of its assets, and transactions. Interest bearing liabilities are recorded at their fair value. For assets/liabilities classes, where it is not possible to ascertain historical values the company uses judgments. The company calculated depreciation of its assets u sing a straight-line method over the useful lives of assets based on their costs less residual value, which are subject to scrutiny every year. In some asset classes, both companies recognize impairment in their value on the basis of their recoverable amounts. It also amortized capital leasehold rights on a straight-line method and recognized operating lease payments in the income statement. The accounting strategy of both companies seemed to be appropriate that is to provide true and fair financial information and supporting data.