ipl-logo

Fasb Framework Of Financial Accounting

1006 Words5 Pages

Certain exclusive protocols and set standards exist across various professions and are universally practiced by individuals and organisations associated with them. Like any other profession, accounting is no exception and adorns certain standard operating procedures which outline the approach towards reporting accounting information. There are two prominent set of standards incorporated across the accounting world: Generally Accepted Accounting Principles(GAAP) and International Financial Reporting Standards(IFRS).
Th GAAP have been formulated by the Financial Accounting Standards Board(FASB) under the oversight of the Securities and Exchange Commission of the United States which is responsible for overlooking US financial market activity. …show more content…

Financial statements are a central figure of financial reporting. The IASB’s framework describes the basic concepts by which they are prepared. In accordance with IFRS, financial statements should present fairly the financial position, financial performance and cash flows of an entity. Fair representation means faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the IASB’s framework. An entity conforming with IFRS must include an explicit and unreserved statement of compliance with all the requirements of IFRS in the …show more content…

Financial statements should be prepared on a going concern basis unless management either intends to liquidate the entity or to cease trading, or has no realistic alternative but not do so. Moreover, except for the statement of cash flows, all financial statements should be prepared using the accrual-basis of accounting, under which an entity recognizes the elements of the financial statements when they occur, and they are recorded in the accounting records and presented in the financial statements in the periods when they occur. Each material class of similar items and material items of dissimilar nature or function should be presented separately. If a line item is not individually material, it is aggregated with other items either in those statements or in the notes. In addition to this, comparative information of the previous period should be disclosed for all amounts presented in the current period’s financial statements. Comparative narrative and descriptive information should be included when it is relevant to an understanding of the current period’s financial statements. Moreover, the presentation and classification of items in the financial statements should be consistent from one period to the next. IFRS requires companies to make significant new disclosures. An entity should present a complete set of financial

Show More
Related

  • FASB Accounting Standards Codification Case Summary

    254 Words  | 2 Pages

    ABC offers separately priced extended warranties for appliances sold that are non-refundable and have no limits to the potential cost of honoring the warranty. Although ABC does track warranty profits and losses by appliance type, assume that no analysis has been performed to determine the rates at which cost are incurred throughout the warranty period. Assuming that manufacturer warranties provide coverage for the appliance for 1 year from the date of purchase, when should revenues and expenses of such warranties be recognized? FASB Accounting Standards Codification (ASC) topic 605-20-25-3 (Revenue Recognition) states that in regard to extended warranties “revenue shall be recognized in income over the period in which the seller is obligated

    Read More

  • Hcs/531 Week 4 Health Care Paper

    1417 Words  | 6 Pages

    When being placed in the role of a manager, it is important to understand the finances of the organization and how to read and understand the recording of finances. It is also important to understand how all the different parts of the records fit together to give us the knowledge of where the business is financially. Knowing also the different responsibility centers related to financial recording and how they function is important as a manager. Once a manager understands what and where items belong on a balance sheet, they will better understand the state that the business is in. “It provides you with a picture of the financial health of your practice or organization on a certain date.”

    Read More

  • Macy's Accounting Principles

    185 Words  | 1 Pages

    The financial data and the information provided in the analysis of the financial situation are following the accounting principles (GAAP). Some other data and results which are not accepted GAAP but related

    Read More

  • Being A Medical Assistant Essay

    1277 Words  | 6 Pages

    When recording financial activity of a business, “any increase in expense (debit) must be offset by a decrease in assets or an increase in liability (credit)” (Routh 464). Any expense for any office supplies decreases cash or increases accounts payable. Each account is assigned a number to enter data in a list of categories “to track the sub-accounts of assets, liabilities, income, expenses, and equity” (Routh 464). This is a way to bookkeep the charts of accounts.

    Read More

  • Wgu Audit Task

    529 Words  | 3 Pages

    Clients must keep records and books of accounts including cash book, sales ledger, purchases ledger and general ledger. Supporting documents such as invoices, bank statements, pay-in slips, cheque butts, and receipts for payments, payroll records and copies of receipts issued should be retained. A valuation of the stock in trade should be made at the end of the accounting period and the appropriate records maintained. Company should record sufficient to explain each transaction and to enable a true and fair profit & loss account and balance sheet to be prepared. At the end of the accounting period, a physical stock-take should be made to ascertain the quantity and the cost of the stock in hand or the cost of work in progress statements and

    Read More

  • • What Are Pro Forma Financial Statements Based On?

    477 Words  | 2 Pages

    What do pro forma financial statements show? There are various things Pro forma financial statement shows but first, let’s understand the word pro forma which means a financial statement based on projection and assumption of what the business future would be to determine what should be happening now. Pro forma financial statement can be thought of as a “Projected results for financial statements in the future, given assumptions about what will happen in the meantime” (Siegel & Yacht, 2009, p. 81).

    Read More

  • Acc 201 Final Project Part 1 Accounting Cycle

    1187 Words  | 5 Pages

    ACC 201 Final Project Part I Accounting Cycle Report Vanessa Ann Williams Southern New Hampshire University The accountant cycle has really impacted me to gain insight on the financial side of Peyton Company. In the accountant cycle, there are many particular directions involve determining the growth of the company such as steps, role, omission and financial statements. It’s important to apply every step from the accountant cycle to make a financial critical decision in the long run. This report will have a breakdown of how to apply the accountant cycle for Peyton Company to be aware of future financial decisions to keep the company holding strong.

    Read More

  • Target Corporation Executive Summary

    477 Words  | 2 Pages

    There are essential common concepts between GAAP and IFRS including both require parent companies to consolidate financial statements that include subsidiary companies, in the consolidated financial statements the parent company has to report 100% of subsidiaries assets, liabilities, revenue, expenses, gains and losses and the parent company is in control as long as it assumes more than 50% possession of outstanding common stock (James, 2010). Also, both require that goodwill be identified on the combined financial statements if the procurement cost surpasses the fair market value of the subsidiaries recognizable assets and goodwill is remunerated (James,

    Read More

  • The Importance Of Accounting Memo

    1616 Words  | 7 Pages

    Analysis • This section is regarded as the most critical step in writing an effective accounting memo by bringing together the required facts of the research, any supporting authoritative literature, and an accountants overall evaluation before forming a conclusion. • Analysis includes information from relevant guidance, along with an accountant’s own words about how the guidance is applicable. • The memo should contain enough authoritative guidance that the user will not need to perform additional research in the Codification. • Make sure to utilize the concept known as the “guidance sandwich.”

    Read More

  • Essay On Pro Forma

    552 Words  | 3 Pages

    Public companies may quite appropriately wish to focus investors’ attention on critical components of quarterly or annual financial results in order to provide a meaningful comparison to results for the same period of prior years or to emphasize the results of core

    Read More

  • Inventory Valuation Analysis

    1594 Words  | 7 Pages

    Having different accounting standards in the world is a problem for multinational public limited companies and investors in order to be able to compare and evaluate financial statements (Doupnik & Perera, 2009). Due to the economic and financial scandals and meltdown in recent years, the pressure has been increased on some countries such as United States. Therefore, it must eliminate the gap between the International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (GAAP). The world of accounting diversity will have consequences on such changes, and the standard convergence of US GAAP with International Financial Reporting Standards also largely affect corporate management, investment, stock market, accounting personnel and accounting standard setters. In addition, the convergence of accounting standards will change the approach for international accounting harmonization to CPA and CFO, it affects the quality of international accounting quality standards and the effort made toward GAAP and IFRS convergence

    Read More

  • Tesco Accounting Report

    1656 Words  | 7 Pages

    Also many companies reporting related to the state of the value added or environmental information, these are concentrated in industrial sectors. The financial statements reflect the financial position of company, financial performance and cash flows of the company, it is significant to note that the correct depiction of the impacts of transactions and other events and circumstances according to the explanations and criteria identification of assets, liabilities, income and expenses go in the same outline (Brealey,

    Read More

  • Accounting Information System Literature Review

    1372 Words  | 6 Pages

    Table of Contents Abstract: 3 Introduction: 3 Functions of an Accounting Information System: 4 Literature Review: 4 The Role of Financial Statement in Managerial Decision Making: 6 Accounting Information System related to Decision-making process: 7 Accounting Information on Decision-making Process: 7 Conclusion: 9 References: 10 Abstract: This paper discussed the extended normative model and supported through a longitudinal study. It is exploring the roles of Accounting Information Systems in an organization facing financial stages. Many teams suffer the various crises in different types.

    Read More

  • The Importance Of Accounting In Personal Finance

    748 Words  | 3 Pages

    According to Averkamp (2016), “accounting is the recording of financial transactions plus storing, sorting, retrieving, summarizing, and presenting information in various reports and analyses”. Therefore knowing how to carry out these tasks

    Read More

  • Importance Of Accounting Information System

    925 Words  | 4 Pages

    The main important purpose of the accounting information system is to promote the activity of the enterprise and to form a reliable and real picture of it. In addition, the accounting information system promotes the activity of the enterprise effectively by preparing up-to-date information statements, providing as much information as possible so that the data should be understandable all users not only for the experts(bookkeepers) and tracking liquidity. Nowadays accounting software is a programme which makes accounting work processes easier and faster and which makes it possible to meet the information demand of the management. It also can support the accountants’ work, helping to compile reports by in helping to compile reports by recording and processing the events concerning the

    Read More

More about Fasb Framework Of Financial Accounting

Open Document