Advance Financial Accounting

Advance Financial Accounting

Introduction

IPSASB - International Public Sector Accounting Standards Board is an independent body that was established to provide guidance for preparation of financial statements. These are high quality financial standards that facilitate public companies across the globe for better preparation of financial statements.

In a globalised economy, in which businesses operate in many countries, it is important to have a consistent approach to accounting and financial reporting, so that internal decision-making and investment decisions can be made. If the definitions and recognition of balance sheet items and the details included or omitted in income reports are consistent, the results of operations and investments can be compared on an equal basis. This will result in better business decisions.

The role of the conceptual framework in Australia is to build a common understanding of financial reporting for all people in business. The framework also builds consistency with international accounting standards and concepts as it is aligned with an international framework. The conceptual framework is used as a basis for developing accounting standards. The focus of this paper is on an extensive consultation paper that would be related to the Conceptual Framework from the International Public Sector Accounting Standards Board.

Discussion

Consultation Paper

The concept of Consultation paper is concern with the concepts that are applied to general purpose financial reporting i.e. financial reporting. These are based on accrual accountancy. Under this accounting, company transactions and other similar events identified in company's financial statement at a time when they take place. This method does not take into consideration of the immediate cash payment or any receivables. Hence, these transactions are recorded and identified during yearly financial statements (International Public Sector Accounting, 2012).

Purpose of Consultation Paper

The purpose of this Consultation paper is to provide a set of guidelines for specific matter on requested comments. Preliminary Views has not yet been provided by IPSASB - International Public Sector Accounting Standards Board on each comment (comments here means issues that company faces with respect to presentation of information in the GPFRs of public sector entities in terms of relevance, presentation and perspectives of constructing presentation of information,). IPSASB respond to each issue that has been discussed in this Consultation paper. In short, this paper highlights, financial statement presentation, it recognition, qualitative characteristics application and things related to it statements (International Public Sector Accounting, 2012).

Sustainability of Consultation Paper

This paper offer pubic companies Long Term Fiscal Sustainability in order to meet financial reporting objective that is decision making and accountability. Since financial statement main objective is accountability, other objective cannot be linked with this objective. Beside this, it offers details for additional statements for particular projects and also provide summary of this projects. It is inclined with the different level of government practice and provides recommendation towards improvement. These guidelines are based on underlining existing legal framework that meets future with assumption of certain fiscal constraints, such as taxation levels. It has also been connected with concept of inter-generational equity that is fairness statements (International ...