Enforceable Frameworks

Table of Contents

Introduction3

Executive Summary4

The concept of accounting (financial) statements5

Users of Financial Statements6

Legislative Regulation of the Accounting (Financial) Statements7

Documentation of Accounting8

Role of Conceptual framework10

Framework for the Preparation and Presentation of Financial Statements12

Inconsistencies or Internal Logical Errors14

1.Measurements14

Criticism14

Suggestion15

Solution16

2.Definition and Recognition of Assets16

Definition17

Recognition17

Solution18

3.Definition and Recognition of a Liability19

Common complaints with the definition20

Recognition20

Solution21

References22

Introduction

Since the early 90's, the transition from centrally planned to a market economy, accounting treatments has undergone fundamental changes. These profound changes have affected such important controls, such as accounting, financial control and analysis. In modern terms - accounting (financial) statements is considered as an academic discipline, which is dynamic and exciting in nature to many of its users (owners, founders, investors, creditors, tax authorities). It is based on current views of the concepts of accounting (financial) reports in the national and international practice. Here the essence and purpose of financial statements pertains to the market economy, the range of users, addresses, dates of granting and requirements that applies to the financial statements and the factors that contribute to the need to adapt the national reporting system to the requirements of International Financial Reporting Standards (Deegan 2009, pp. 225 - 227).

Executive Summary

This paper aims to discuss the theoretical and conceptual framework pertaining to accounting, in order to solve the inconsistencies embedded in the AASB framework by discussing the pertinent issues of the international accounting bodies and framework, such as FASB and IASB.

Enforceable Frameworks

The concept of accounting (financial) statements

Financial Statements are an integrated system and credentials of assets, liabilities and results of business activities, and are based on the accounting records of the prescribed form (Deegan 2009, pp. 239 - 243). The system records the data (parameters) and prepares financial statements, which are derived directly from the general ledger accounts - the most important case of the accounting system. In this case, the balance sheet is a list of the books of account balances, and the profit and loss account - the list of RPM Scoring accounts (before closing) of the same book. Thus, the set of accounting indicators that make up the accounts is formed directly or indirectly from the general ledger accounts. Consequently, the reported data is grouped in the accounting records and may not reflect these economic revolutions that did not exist in the current account. This implies the organic link between the accounting and financial reporting, which is generated in the account; hence the resulting data is derived from the corresponding reporting forms in the form of synthesized totals.

Accounting process consists of four main stages. In the first stage, the documentation of various business transactions is concerned, while the second stage comprises of the credentials, which are classified and brought together by reflecting on accounts (in the accounting records and the general ledger). The third stage is composed of the reporting forms and disclosures in the financial statements; while the fourth stage analyses the activities of the organization, both in reporting terms and on credentials. The results of the analysis are used for both internal and external users of financial ...