Accounting :: essays research papers

PrefaceFinancial statements argon prepared and presented for external users by many enterprisingnesss around the world. Although such monetary statements may appear similar from country to country, there are differences which have probably been caused by a shape of social, economic and legal circumstances and by different countries having in mind the needs of different users of pecuniary 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 in like manner 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 made in them have also been affected. The International Accounting Standards Committee (IASC) is committed to narrowing these differences by seeking to harmonise regulations, accounting standards and procedures relating to the preparation and video display of financial statements. It believes that further harmonisation can best be pursued by focusing on financial statements that are prepared for the purpose of providing breeding 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 nearly all users are making economic decisions, for example, to (a) decide when to buy, hold or sell an equity investment (b) assess the stewardship or accountability of management (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 profits and dividends (g) prepare and use national income statistics or(h) regulate the activities 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 redeemable historical cost and the nominal financial large(p) maintenance concept. Other models and concepts may be more appropriate in order to meet the quarry 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.