Australian Accounting Standards

Accounting is the methodical and full recording of financial transactions relating to a business, and it also denotes to the procedure of briefing, examining and evaluating these transactions to cross checking agencies and tax collection agencies. Accounting is one of the key purposes for nearly any company. It may be done by an auditor and accountant at small businesses or by substantial finance subdivisions with lots of employee’s at

The field of accounting is constantly evolving. This is true not only for the theory of accounting itself but also the entities that govern its theory and practice. Presently, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are faced with some of the biggest challenges to date. To understand the significance of these two boards, it is necessary to understand their histories, relations between the boards, and the standards that they set. Also how the knowledge of these boards and the field they lead, gained through the masters of science in accountancy

Accounting standards are important. For example, if accounting is considered as the language of business, accounting standards are its grammar. Properly developed and implemented, they can encourage business expansion and help regulate the economic system. High-quality accounting standards can facilitate the flow of information from businesses to a range of different users. These include investors, banks, creditors, the revenue commissioners, regulators, employees and the general public. The availability of accounts prepared in accordance with recognized accounting standards encourages trade by promoting confidence in businesses.

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.

However, this Statement maintains the scope of Interpretation 46(R) with the previous additional entities treated as special qualifying entities for purposes. The concept of these entities was eliminated in Statement No. 166. Therefore, the statement No. 167 also superseded the risks of quantitative-based and calculation of rewards to determine which enterprise, if any, provided a financial interest that controls an entity variable interest because the expectation of an access of the basic qualitative will be more efficient to identify which company has a financial interest of controlling in an entity variable interest. However, this is the way the FASB admitted to upgrade the financial reporting standards. Other additional necessity is an additional review event when deciding whether a company is a variable entity interest when there are any occurring circumstances and changes in facts. For instinct, the owner of the equity investment at risk, as a group, lose the power from voting rights to direct the activities of the entity that some characteristic impacts the economic entity’s performance. There will also be ongoing assessments of whether an enterprise is the key beneficiary of a variable interest entity.

The users of the general purpose financial statements of the SMEs are interested in some specific disclosures (Deegan 2014). For example, these disclosures are solvency, liquidity, measurement uncertainties, choices of accounting policy, encountered transactions, short-term cash flows, liabilities recognition, obligations and contingencies (Australian Accounting Standard Board 2010). Following the requirements of IFRS for SMEs, users can interpret the information which they need with less unrelated disclosures. The designation of IFRS for SMEs bring transparency by allowing users to improve economic decisions due to the quality of financial information.

Accounting Standard AASB 116: Property Plant and Equipment (Australian Accounting Standards Board) states, expenditure is entered into the comprehensive income statement only when the given conditions are met.

Accounting standard are the accounting rules that accounting entity need to follow in reporting the financial statement.Accounting standard concerns with how assets and liabilities should be measureed in identified in the statements. Traditionally each country develop it own standard. In Australia, every business entity need to follow the Australia accounting standard which is set by Austrailia Accounting Standard Board (AASB). Here are the two accounting standard set by AASB:

The analysis presents the impact of financial accounting regulations on business in Australia. The first part of the analysis provides the aim of financial accounting regulations and a brief discussion about different governing regulators in Australia along with their specific responsibilities.

The purpose of International Accounting Standard 16 (IAS 16) is to outline the treatment for most types of property, plant and equipment. Initially, Property, Plant and Equipment will be realised at its cost and after that it will be measured either using a cost or revaluation model. The asset will be depreciated in such a way that the depreciable amount will be assigned over the period of its useful life on a methodical basis. [IASPlus, n.d]

Accounting is the language of business. It is a profession that is being guided by principles, concepts, conventions, laws, etc. All these fundamental building blocks serve as common and general compasses to all practitioners of the profession. In some cases, they are nation-wide tailored, while in other cases, they are universally tailored. Accounting as a living, practical, dynamic and realistic profession covers so many areas of social, economic (business), and governmental activities. Surely, any endeavour that involves monetary and material activities create a room for the services of Accounting. Many of the human endeavours for which the accounting profession plays significant (some times inevitable) roles include; Banking, Insurance, Manufacturing, Farming Contracting, Oil and Gas, Mining, Transportation (Air, Land and Sea), Educational Institutions, Churches, Ministries, ICT, Hire Purchase, Local Government Authorities, Estate Businesses, Export and Import Businesses, Bill of Exchange Transactions, Royalties Transactions, Consignment Transactions, Stock Market Transactions, Sports, Entertainment, Hospitals and Hospitality Industry, etc.

According to Black (2009: 2), accounting can be defined simply as the recording, summarizing and interpretation of financial information. A more detailed definition is that offered by the American Accounting Association (1966), as follows: ’The process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information’. This means that, in terms of identifying, this should focus on the key financial segment of an organization, like liabilities, assets and capital. Measuring, on the other hand, refers to the budget of the company and it shows a true and fair view of the organization. Next, communicating refers to the financial information which is transmitted to the people who need this information.

The following is the text of Accounting Standard 13, 'Accounting for Investments', issued by the Council of the Institute of Chartered Accountants of India. This Statement deals with accounting for investments in the financial statements of enterprises and related disclosure requirements.

The conceptual Framework of the International Accounting Standards Board (IASB) was issued in 1989 by the International Accounting Standards Committee (IASC) to provide a theoretical and non-arbitrary structure to guide the development of accounting standards. The Conceptual Framework was defined by the Financial Accounting Standards Board (FASB) as a ‘coherent system of interrelated objectives and fundamentals that are expected to lead to consistent standards and that prescribe the nature, function, and limits of financial accounting and reporting ’ (Godfrey, Hodgson, Tarca, Hamilton, & Holmes, 2010, p. 94).

There are two parts of Accounting Standards which are accounting principles and methods, in order to contemporize elementary accounting fundamentals and approaches for sustaining appropriating social development of books and readying for financial reports.