Adding Up Assets

 

Accountants are often criticized for not having an economic perspective. It has been continually debated whether U.S. Generally Accepted Accounting Principles (GAAP) should allow companies to report economic assets on their balance sheet. There are two major problems if the Financial Accounting Standards Board (FASB) allows economic assets to be valued. First, financial statements will lose their comparability and verifiability. Second, managers will have more opportunities to misguide and misdirect investors. Due to these problems, economic assets should not be added to the balance sheets.

The conceptual framework is a set of fundamentals and objectives that improve financial reporting. Two qualitative characteristics that financial reporting would lose if economic assets are journalized would be comparability and verifiability (Switter, Leisenring, Lott, and Alqamoussi, 2014). Every company is unique, and each would have drastic differences in their economic assets like brand value, operating expertise, and brain power (Aston, 2002). Companies’ statements would no longer be comparable. There isn’t a single, correct way to value economic assets; therefore, financial statements wouldn’t be verifiable.

GAAP is a rules-based system that gives managers very little discretion. As mentioned before, economic assets are extremely hard to value. Managers could manipulate the amount reported, thus inflating the value of their company (J. Doyle, personal communication, September 30, 2014). By reporting fraudulent figures on the balance sheet, in the long-run investors would be hurt.  Financial markets would be inefficient and unstable, possibly leading to a stock market crash.  

The financial statements of the company do not need to have the economic assets reported. While this would look better for the company, it is not worth the negative effect on financial statements or the possibility of managers’ fraudulent activity. Reporting the economic assets in the financial statements wouldn’t even affect the market price because the market already adjusts for them. Even though economic assets are important for decision making, they shouldn't be reported on the balance sheet.

References

Aston, A. (2002, August 26). Brainpower on the balance sheet. BusinessWeek, 110-111.

Switter, J., Leisenring, J., Lott, R., & Alqamoussi, J. (2014, July 3). Conceptual framework. Retrieved              from http: //www.fasb.org/cs/ContentServer?pagename=FASB%2FFASBContent_C%2Fproject

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Characteristics of a Professional Employee

Professional employees set themselves apart from average employees by acquiring and demonstrating professional characteristics.  First, professional employees are action-oriented. Second, professional employees are self-aware.  Professional employees go above and beyond what their employers ask for and expect.  Being action-oriented and self-aware puts any employee at an advantage.

Employees demonstrate professionalism in their career by being action-oriented.  As soon as they are given a task, they promptly begin working on the job.  Not only do they complete the assignment promptly and quickly, but professional employees are thorough and precise.  One important aspect of being action-oriented is taking the chance and risk to become a more valuable asset to the company.  They do not let opportunity pass them by, but take the chance to grow.  If the opportunity results in failure, they learn from their mistakes and continue with confidence (Sundheim, 2013, para. 3).

An important characteristic for professional employees is to be self-aware.  They not only care about their performance but how they are affecting their coworkers.  Professional employees are selfless and will do anything to help others succeed.  They understand not only their strengths and weaknesses, but also their team members’.  A professional employee utilizes strengths instead of dwelling on weaknesses (Farrell, 2011).

            In the competitive business world, it is important to differentiate yourself from others.  You can do so by being a professional employee and having desirable characteristics to employers.  Two characteristics that set professional employees apart from others is being action-oriented and self-aware.  If you strive to develop these characteristics, you will succeed in the workplace. 

References

Farrell, R. (August 3, 2011). 23 traits of good leaders. CNN Living. Retrieved from http://www.cnn.com/2011/LIVING/08/03/good.leader.traits.cb/

Sundheim, Ken. (April 2, 2013). 15 traits of the ideal employee. Forbes. Retrieved from http://www.forbes.com/sites/kensundheim/2013/04/02/15-traits-of-the-ideal-employee/