Accounting Analysis On Accounting Standards

The conceptual framework is an attempt to provide a metatheoretical structure for financial accounting. SFAC No.3 defines 10 elements of financial statements. It is obviously a resolution of the definitions presented in the discussion mem for the conceptual framework project. Elements are what accounting professionals measure and the attributes is about how to measure. Definitions can be helpful to the financial statements which have been formulated in order to help professionals to specify the qualification are. Also, the definitions must be expressed in the metatheoretical structure.

It define the scope of judgment in planning financial statements by formulate the characteristic, activity and restrict of financial accounting and reporting. It also increases different of financial statements by reduce the number of other accounting methods. If standards were come from a reasonable style of concepts. Likewise, reporting requirement will be more constant and fair because they will record accounting base on former set of concepts. Moreover, the setting requirement will be more economical because problem should not be discuss from different position. In additional, it help to reduce accounting common error and political

As stated earlier, the IASB arose from specific needs of the accounting industry and the public. As international trade has increased, the need for transnational accounting information has increased as well. This sparked the demand for development of international accounting standards to make financial data between countries more comparable. In 1973, the International Accounting Standards Committee (IASC) was formed to develop these international standards. The standards issued by the IASC, prior to 2001, were called International Accounting Standards (IASs). In 2001, the IASC made the International Accounting Standards Board (IASB) the official international standard-setting body. The standards issued by the IASB are called International Financial Reporting Standards (IFRSs) (Schroeder, Clark, & Cathey, 2011, p. 82-87).

As the complexity of our financial economy develops it is important that our accounting standards progress in accordance. Accounting is very important to the development of the global and local economies. Accounting is basically the gathering, summarizing and presenting of financial information of an entity to interested internal, external and possible investors. This information should be presented in a non-bias way so that other people are able understand.

To over view the knowledge we learnt from accounting theory and practice, the main thing I can conclude that is the tendency of accounting will shift away from technical way to people’s behaviour way. By understanding what should do, we should ask why and how we could improve and change it into a better way. This essay aims to explain how the theoretical material that we learn in lectures can be developed under a real practical manner.

The International Accounting Standards Board and the IFRS were created in 2001, which replaced the International Accounting Standards Committee (IASC) (IFRS ,2016). The monitoring board was created in 2009 (IFRS ,2016). ISAB and IFRS work to bring transparency, accountability and efficicenny to financial markets around the world (IFRS , 2016). The accounting standards are set as requirements to be allowed by organizations when the financial statements are prepared (IFRS, 2016). Standards are set by the IASB are the IFRS Standards (IFRS, 2016).

IFRS was created in 2001 with nearly the same objective as FASB, creating high caliber, effective, and efficient standards not just locally but globally. Their headquarters are in London, England. Within a 15 year span, almost 120 different countries have begun to follow and report under IFRS. By adopting IFRS, a business can present its financial statements on the same basis as its foreign competitors, making comparisons easier and allowing them to engage in different markets (IFRS, 2016). IFRS is seeking unity so it is easier to compare financial reports country to country. This will make companies marketable in foreign places and allow foreign competitors to easily enter different markets.

The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) are working together to eliminate a variety of difference between the United States generally accepted accounting procedures (U.S. GAAP or GAAP) and International Financial Reporting Standards (IFRS). This convergence project grew out of an agreement reached by the two boards in 2002 (Deloitte, 2004).

AASB 8 is an important Accounting Standard from the financial information reporting perspective. It ensures that the entity has to disclose enough information to the user of financial information about the economic activities the entity is involved into and the scope or spread of these activities. The standard requires the entity to provide information about the reportable operating segments of the entity. Operating segments are the components of the entity of which separate financial information is available and it is regularly evaluated by the management – more specifically – the CODM – i.e. the Chief Operating Decision Maker to assess the performance of the particular component and to allocate resources in appropriate

First, The International Accounting Standards Board (IASB) issues The International Financial Reporting Standards (IFRS) on U.S securities and exchange companies listed.

It has been become an issue of great concern that the accounting profession must find a common theory in order to address and put the issue at rest. This therefore, has called for the study of this topic under review “the demand for and supply of accounting theories: the market for excuses. As a result of this several questions have been raised. For instance, the question of why accounting theories are predominantly normative has been put forward by this article? Secondly, why no single theory in accounting profession that is generally or widely accepted? It has been argued that the financial accounting theories have been found to be ineffective most especially in the area of impacting accounting practice and policy, though, this has been

The definition of accounting theory according to Coetsee (2010) is described in two different ways. The first philosophy concludes that accounting theory is a set of general principles that guide the evolution of accounting practice. The other philosophy describes accounting theory as activity of explaining and predicting accounting practice. What the viewer can see from the statement of the first philosophy is that the accounting theory exists before accounting practices meanwhile the latter states that the accounting practice exists before the theory. Since there are many arguments about this matter, many academic researchers have concluded that accounting theory can be divided into two categories which are positive and normative theory.

Accounting is the art of measuring and communicating financial information. To maintain uniformity and consistency in preparing and maintaining books of accounts, certain rules or principles have been evolved. These rules or principles are classified as concepts and conventions. One of the important concept in accounting is “Measurement” (Mattessich, 1977)

The Conceptual framework was introduced in 1989 by the International Accounting standard board also known as IASB.

The development of accounting standards and rules is based upon conceptual framework which is part of system of financial reporting. These standards set the nature, function and limits of financial account and financial statement. In line with the suggestion of Reichel and Ramey (1987), conceptual framework is described as a set of broad ideas and principles taken from relevant fields of enquiry and used to structure a subsequent presentation. This reflects the items such as equity, expenses, income, assets and liabilities in financial statement. The International Accounting Standards Committee (IASB) is the body that developed the international conceptual framework in 1989 with the hope to attain global acceptance .The objective is to improve financial reporting which indicate the preparation of financial statement for limited company by providing updated, clear and complete set of concepts. In order to evaluate the role of conceptual framework, this essay aims to provide a discussion of the usefulness and limitations of conceptual framework in relation of International accounting standards. As mentioned above, the usefulness of conceptual framework includes consistency, comparability and credibility. Meanwhile, the limitations involve the difficulty to set up, difficulty to create the new ideas and may only benefit to certain groups.