(230)-EXTRAORDINARY ITEMS AND PRIOR YEAR ADJUSTMENTS

Extraordinary Items and Prior Year AdjustmentsThe all-inclusive conceptSSAP was based on the all-inclusive concept whereby the profit and loss account reflected all profits and losses including extraordinary items.Extraordinary itemsTwo key definitions:Extraordinary items are material items which derive from events or transactions that are outside the ordinary activities of the company and which are...

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(229)-A CONCEPTUAL FRAMEWORK OF ACCOUNTING

A Conceptual Framework of Accounting IntroductionThe standard-setting process has proceeded for almost two decades in the absence of a conceptual framework underlying the preparation of periodic financial statements. This has resulted in illegalities and inconsistencies in several of the accounting...

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(228)-ACCOUNTING FOR SUBSTANCE

Accounting for Substance Substance over form The principle of substance over form was introduced in international accounting standards.International accounting standards refers to three fundamental accounting assumptions:Going concern Consistency Accrual International accounting standards further refers to three considerations that should be accounted for and presented in accordance with their substance...

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(227)-VARIATIONS IN ACCOUNTING PRACTICE

Variations in Accounting Practice The accounting standards programmed has sought to eliminate the scope for variations in accounting practices, both within company annual reports and between one company and another. Nevertheless there remains significant scope for variations. Some of the more common areas are referred to below. Impact of fixed asset revaluations Depreciation charges may be based on...

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(226)-FUNDAMENTAL ACCOUNTING CONCEPT

Fundamental Accounting Concepts Disclose of accounting policies refers to four basic assumptions underlying the periodic financial statements of enterprises. The turn used to describe these broad assumptions is fundamental accounting concepts. Going concern concept This assumption that the enterprises will continue in operational existence for the foreseeable future. This means that there is no intention...

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(225)-FINANCIAL STATEMENTS

Financial Statements Terminology The term “financial statements” is usually taken to include the balance sheet, profit and loss account and cash flow statement together with notes to the accounts. The term will include the additional statements and notes required by financial reporting standards (FRS). Accounting conventions Pure historical costFinancial statements some companies are usually prepared...

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(224)---SOME IMPORTANT LEGAL REQUIREMENTS IN FINANCIAL STATEMENTS

Some Important Legal Requirements in Financial Statements Terminology Accounting reference period (ARP), the period by reference to which the financial statements have to be prepared and presented to members. Accounting reference date (ARD), the date on which the Accounting reference period ends. Financial year (FY), the period covered by the statutory profit and loss account, whether or not this...

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(223)-PREPARATION OF ACCOUNTS AND FILLING REQUIREMENTS

Preparation of accounts and filling requirements Form and contentCompany Profit and loss accounts and balance sheets must comply with the company's act format requirements. These must be accompanied by notes which comply with the disclosure requirements of the company's act as well as the relevant standards.In additionally to the accounts a director’s report is requiredLarge public limited companies...

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(222)-STOCK EXCHANGE DISCLOSURE REQUIREMENT

Stock exchange disclosure requirements The international stock exchange requires the annual report and accounts of a listed company to disclose a large number of matters including the following a statement by the directors as to the reasons for any significant departures from applicable standard accounting practices An explanation, should trading results shown by the current period's accounts differ...

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