Accounting :: essays research papers

PrefaceFinancial statements are prepared and presented for external users by more enterprises around the world. Although such monetary statements whitethorn appear similar from inelegant to country, there are differences which exact probably been caused by a concoction of social, economic and legal wad and by different countries having in headway the necessarily of different users of monetary statements when setting national requirements. These different circumstances have led to the use of a variety of definitions of the elements of financial statements that is, for example, assets, liabilities, equity, income and expenses. They have also resulted in the use of different criteria for the recognition of items in the financial statements and in a preference for different bases of measurement. The scope of the financial statements and the disclosures do in them have also been put oned. The International Accounting Standards Committee (IASC) is act to narrowing these differ ences by seeking to harmonise regulations, method of accounting standards and procedures relating to the preparation and instauration of financial statements. It believes that further harmonisation can best be pursue by focusing on financial statements that are prepared for the pop the question of providing information that is useful in making economic decisions. The Board of IASC believes that financial statements prepared for this purpose meet the common needs of most users. This is because or so all users are making economic decisions, for example, to (a) decide when to buy, hold or sell an equity investment (b) pass judgment the stewardship or accountability of solicitude (c) assess the ability of the enterprise to pay and provide other benefits to its employees (d) assess the security for amounts lent to the enterprise (e) determine taxation policies (f) determine distributable net and dividends (g) prepare and use national income statistics or(h) regulate the activitie s of enterprises. The Board recognises, however, that governments, in particular, may specify different or additional requirements for their own purposes. These requirements should not, however, affect financial statements published for the benefit of other users unless they also meet the needs of those other users. Financial statements are most commonly prepared in accordance with an accounting model based on recoverable historical cost and the nominal financial capital maintenance concept. Other models and concepts may be more appropriate in order to meet the verifiable of providing information that is useful for making economic decisions although there is presently no consensus for change. This Framework has been developed so that it is applicable to a range of accounting models and concepts of capital and capital maintenance.