accounting standards


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Generally Accepted Accounting Principles

Rules to which accountants adhere when preparing financial statements. The Generally Accepted Accounting Principles exist to ensure that American accountants are using the same or almost the same standards so that comparison of financial statements between or within a company is easy and accurate. They also promote transparency in accounting. The GAAP are set by the FASB. See also: International Financial Reporting Standards.

accounting standards

guidelines relating to the accounting treatment of the figures which are reported in the accounts of companies. They were introduced to reduce the possibility of having large variations in reported profits and to restrict the room available for manoeuvre by those charged with the task of preparing the accounts.

Prior to 1990 Statements of Recommended Practice (SORPS) and Statements of Standard Accounting Practice (SSAPS) were issued in the UK by a joint committee of the professional accounting organizations. These covered various matters, including:

Accounting policies; post balance sheet events and contingencies; earnings per share; taxation; stocks and long-term contracts; cash flow statements; research and development; and group accounts.

In 1990 the accountancy bodies set up a new organization to oversee accounting standards, the Accounting Standards Board which issued a number of statements that are now called Financial Reporting Standards (FRSS). The FRSs were drawn up to comply with both UK law, the Republic of Ireland law, and EU directives.

In recent years the International Accounting Standards Board (IASB) has overseen the development of International Financial Reporting Standards (IFRS). These standards now apply to all large quoted companies in the European Union, which from the beginning of 2005 are required to report their interim and final annual accounts expressed in terms of these standards. Application of these standards initially generate different reported profits and balance sheet asset values from those which would result from using national generally-agreed accounting principles or national financial reporting standards.

To date IFRS apply only to EU companies, and the USA, Japan and other developed countries use their own national accounting standards, though the US Financial Accounting Standards Board and the IASB are working to harmonize their rules. The goal is to produce a single set of global accounting standards to improve the transparency and consistency of financial reports.

References in periodicals archive ?
Other provisions of the Ministry of Finance on the government accounting standards system.
El International Accounting Standards Committee Foundation (2001), adopto el MC para la preparacion y presentacion de los estados financieros, emitido por el IASC, en el ano 1989; cuyo proposito es: ser guia para el desarrollo de futuras normas; promover la armonizacion de las normas; ayudar a los organismos nacionales de normalizacion a la hora de desarrollar sus propias normas; ayudar a los elaboradores de los estados financieros a aplicar las NIIF; ayudar a los auditores en el proceso de formarse una opinion sobre si los estados financieros se preparan de conformidad con las NIIF; ayudar a los usuarios de los estados financieros en la interpretacion contenida en las NIIF; suministrar a todos los interesados informacion acerca de su metodologia.
Seidman the proposed accounting standard would measure financial assets based on how a reporting entity would realize value from them as part of distinct business activities, while the measurement of financial liabilities would be consistent with how the entity expects to settle those liabilities.
Mohamad Nedal Alchaar, Secretary General of AAOIFI, said that the new accounting standards and guidance note were developed in consultation with over 200 AAOIFI institutional members from over 45 counties as well as other key industry stakeholders.
The new accounting standards and guidance note were developed in consultation with more than 200 AAOIFI institutional members from over 45 countries as well as other key industry stakeholders," said AAOIFI secretary-general Dr Mohamad Nedal Alchaar.
public companies for accounting standard setting activities as a permanent funding source for the IASB, Melancon said.
The Financial Accounting Standards Board (FASB) is working with the IASB to converge their respective accounting standards into a robust set of rules that will meet the needs of preparers and users worldwide.
accounting standard for leases is Statement of Financial Accounting Standards (SFAS) No.
Consideration does not include costs incurred in connection with the business combination (such as legal, accounting, valuation and other fees), which are expensed or deferred as required by existing accounting standards.
Thus, there are growing demands for the development of a single set of high quality international accounting standards.
Accordingly, setters of accounting standards need to consider improvements to the accounting treatment that do not result in a disincentive to those who prudently use credit derivatives for risk-management purposes.
The International Financial Reporting Standard is set to replace the various country-based accounting standards among members of the European Union on Jan, 1, 2005, However, the version that will be adopted relating to insurance contracts--IFRS 4--is the result of a compromise between the International Accounting Standards Board and the insurance industry in Europe, which had several problems with the way the proposed standard would treat insurance contracts, particularly concerning the fair-value method of accounting.

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