Free Market Essay Example | Topics and Well Written Essays - 1000 words

Free Market - Essay Example It has been highly controversial whether free market is suitable for the present world economy. It is still unknown which economic policy would solve the fundamental economic problems of the present economy. It is time to analyze whether the concept of mixed economy would find success in this present world. It is again controversial up to what extent the governmental regulation must be allowed in a mixed economy. Moreover, it is also important to review the amount of access of free market and its validity and significance in the present world economy. It will be useful if we analyze the concepts of Adam Smith and Milton Friedman and the opposition of Keynes and Karl Marx in the context of the present world economy. Adam Smith advocated the concepts of free market and explained in his work An Inquiry into the Nature and Causes of the Wealth of Nations the mechanism that he believed being operated in the economic society. According to Adam Smith, individuals strive to attain wealth by aiming only on their personal gain. These individuals however cannot consume everything that they produce and has to share it with others who value it and pay the price for it. So the public interests of the society can be satisfied by this system of division of labor and free market. Smith, the father of economics, have authored the invisible hand which is able to explain all sorts of economic phenomena in all fields. The book has included the valuable views of Adam Smith about free market. Adam Smith explained the concept and told that businessmen or entrepreneurs always aim for the best profit and consumers always do aim for the lowest price. Consumer choice thus would become the force that influences the price in the market. Consumers would demonstrate their demand or negligence towards products that appear in the market. These consumer demand or pressure would thus encourage entrepreneurs or producers to invest more on the same product and bring more of them into the markets. T hus it is nothing but the consumer demand that pressurize the producers to invest their money into the profitable industry. Thus industry brings the most demanded goods to the markets and consumers also receive their favorable products, thereby resulting in the general economic well being of the society. Adam Smith considered this market-based system as a great advantage as people are forced to respond (producers) according to the want and demands of other people. Free market is the concept in which price is regulated by the corresponding demand or supply. Trade and business would be completely voluntary in free market concept without any interference from force, rule or fraud. In a free market system, the theory of supply and demand would rule the economy bringing the prices of the products towards a typical equilibrium state that would balance the demand and the supply. Another major advocate of free market system is Milton Friedman. He opined that that there is a close and direct relationship between economic freedom and economic growth. Milton Friedman, the American economist (famous for his macro and microeconomics) was of the opinion that free markets would challenge and destroy away political centralization and political control completely. In his book, Capitalism and Freedom he mentioned that the role of a government in free market economy is to maintain political and social freedom. Freidman highly supported free market concept and explained several of its advantages. According to him, â€Å"The most important single central fact about a free market is that no exchange takes place unless both parties benefit.† He opined that the one and only way to get a lot of people cooperate together jointly is through free market. As a

Advanced financial reporting and regulation Essay

Advanced financial reporting and regulation - Essay Example The important characteristic of intangibles is that they lack physical substance. It is very difficult to estimate the value of intangibles and there is a high degree of uncertainty regarding the length of time over which they will provide future benefits. IAS 38 clarifies that intangibles should not be recorded as other assets. Also this standard does not apply to intangible held for sale in the normal course of business of the entity. Similarly differed tax assets, leases, assets arising from employee benefits, financial assets, mineral rights, and other exploration and evaluation assets, and most importantly goodwill arising from business combinations do not fall the preview of IAS 38. The identifiable assets should be separable. The entity is in a position to sell, transfer, and license, rent or exchanges the intangibles. It is important to note that intangibles should be clearly distinguishable and controlled separately from the goodwill. Such identifiable intangibles may have arisen from contractual or other legal rights, whether those are transferable or not, or separable from the entity or other rights and obligations. The initial accounting for intangible is largely dependent on whether they are purchased or developed internally. When intangibles are purchased from others, they are initially recorded at their cost. The amount capitalized will include the purchase price and, like other assets, costs of preparing them for their intended uses. As a result, costs of registration or legal fees related to acquisition are also capitalized. When intangibles are purchased in a business combination, the cost to be recognized is the fair value at acquisition. When intangibles are acquired free of cost or received as a grant, the fair value or nominal value and directly attributable costs of such intangibles is recognized. All other costs of intangibles are charged to revenue. Internally generated intangibles are not recognized as