The Basic Concepts Upon Which Financial Accounting is Based Essay

Accounting Standards are public pronouncement set by accounting standards board, which lists the entire accounting requirements for different types of transactions and events. The accounting system in the Australian is applying the Australian Accounting Standards which are set by the Australian Accounting Standards Board (AASB); the standards can be applied to whether private, public and non-for profit organizations and these standards have the force of law for Corporations Law entities under section 296 of the Corporations Act 200. As an accounting student, comprehend the importance of Accounting Standards is very necessary, these standards are the Bible of accounting studies. Accounting Standards helps accounting students to learn accounting

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:

We all know how important the accounting aspect of any business/organization is. It is basically the most important way to manage finances. Without proper accounting for all expenses and finances, a company and/or organization will definitely have a hard time being financially stable. In this paper we will discuss some foundational accounting principles and terminology

There are five main points that the financial statement must contain to remain in conformance with the requirements of this pronouncement. All financial statements issued must “present fairly financial position, cash flows, and results of operations in accordance with generally accepted accounting principles (GAAP)” (FASB, ASC 235-10-05-3, 2009). Within the detail of these financial statements, the accountant must include a summary of significant accounting policies (SSAP) (FASB, ASC 235-10-50-1, 2009). This required disclosure entails: the accounting method followed, such as LIFO or FIFO; the manner of applying the accounting method; determination of the method and any changes in financial position; and, lastly, the reason the accounting principle is best for the company for revenue recognition and cost allocation. Also, if the basic financial statements are not presented together, it is still required for each statement to include the SSAP

Accounting standards are needed so that financial statements will fairly and consistently describe financial performance. Without standards, users of financial statements would need to learn the accounting rules of each company, and comparisons between companies would be difficult. Numerous accounting bodies govern the accounting environment and accommodate the success of a business.

On February 26, 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) which revised the standards on leasing. The intent for this revision was to improve how leases are being reported on the financial statements. The consensus is that the classification tests in current use for making this determination fail to provide a faithful and accurate representation for leasing transactions in general. In 2005, the U.S. Securities and Exchange Commission had also made recommendations which indicated this need for change in regard to how leases were being reported. Overall, it is believed that this change would ensure greater transparency in the financial statements concerning these type transactions.

In 2009, two multinational automotive corporations, Fiat and Chrysler, confirmed a merger that would prove to shake up the automotive industry.

The amount of any reversal of any write-down of inventories, rising from an increase in net realizable value, shall be recognized as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs.’’ Also required for IAS2.36 would be the disclosure of;

Nowadays, with the position of accounting becoming higher, accountants should have enough professional abilities to solve problems or make decisions. In addition, high quality accountants must follow a set of guiding principles for preparing financial reports during their careers. Therefore, numerous principles and rules are significant when it comes to accounting. The External Reporting Board (XRB) which called the New Zealand Conceptual Framework (CF) provides the basic principles. Comparing to CF, the rules-based accounting standards includes more detailed rules. Furthermore, the principle-based standards which based on CF provide broad points of departure for users to apply. This essay will critically assess if the principle-based accounting standards assists or hinders the decision making for accountants facing financial statements. Points covered include the principle-based accounting standards ’

Financial accounting can be defined as reporting of the financial position and performance of a firm through financial statements issued to the external users on a periodic basis. It is a field of finance that treats money as a means of measuring economic performance instead of treating it as a factor of production. It encompasses the entire system of monitoring and control of money as it flows in and out of the organization in terms of assets and liabilities, and revenues and expenses. Financial accounting gathers and summarizes financial data to prepare various financial reports such as

Accounting standards offers standard ways of recognising, measuring and presenting financial transactions. Any change in standards will affect the reporting of an enterprise and its comparison of results over a number of years.

In this assignment I want to explain the importance of the Accounting standards. As the world economy is becoming integrated and globalization is becoming a universal phenomenon, more and more businesses are getting out of the nationalistic perspective. Today one company have subsidiary companies and plants in many other countries. One of the dilemmas that

In the world of business, there are many aspects that go into making a company run smoothly. One of the main departments of every company is the accounting department. Accounting is all about keeping up with the financial records. The accountant can’t just keep up with the records whatever they choose; there are standards that have to be followed. The standards such as how to document, how to measure and recognize transactions for their financial statements, help potential investors see how their company is performing. In the United States those standards are called Generally Accepted Accounting

There are several rules of Law on Accounting that enterprises should be follow in financial statements. The first on is framework,

An accounting standard is a principle that guides and standardizes accounting practices. The Generally Accepted Accounting Principles (GAAP) are a group of accounting standards that are widely accepted as appropriate to the field of accounting. Accounting standards are necessary to provide a meaning to financial statements across a wide variety of business. It facilitates uniformity in financial reporting and ensures consistency in