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ACCT211 (2)
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Acct211 - Notes.docx

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Dyna Seng

Steering committeeadvisory Acct211 committee Frameworktopic 1 Financial accounting is for external Values inherent in accounting users while management accounting subculture influenced by societyis for internal users based values Legislations Accounting systems cannot be considered to be culture freePublic finance act 1989Local government act 2002 Should different countries withCrown entities act 2004 varying cultural values adoptFinancial reporting act 1993 internationally uniform accountingCompanies act 1993 practices Other significant legislationCompanies recognise measure format and disclose in regard to theirSecurities act 1978 national GAAPSecurities market act 1988 Limits comparability of nonFinancial reporting act 1993 harmonization of standardsharderApplies to all reporting for companies in multiple countries entitiesx Based in the IAS acceptedDetails overall financial internationally IFRS reporting framework includes reference to the conceptual Benefits on standard harmonizationframeworkEasy access to foreign capitalDefines terms of reporting markets entity issuer and GAAPCredibility of domesticAmended in November 2006 markets to foreign providers as part of the wider companyLower costs law reforms and international trend towards IFRSComparability Only need of one book Companies Act 1993 19729 countries formedApplies to call companies international accounting standards narrower than FRA committee IASCDetails administrative 2000 ISOCO recommended IASC not requirements some GAAP disclosure requirements and directors responsibilities 2001 International accounting standards board IASB replaced IASC Accounting standardsprior to 1993 were set by public sector International financial reporting standards IFRS After the reform in 1993 accounting ASRB announced listed issuers would standards had legal backing an be required to comply with IFRS Accounting standards review board which is issued by IABS from 2007 and sanctions to be introduced for Compliance with the NZIAS means noncompliance with standards complying with IFRS Accounting Standard Review board Impacts of Adopting IFRS ASRB is set under the FRA 4min 7 max and has the purpose to reviewIntangible assets and where appropriate approveGood will financial reporting standardsRevaluation of PPEPrior period errors Financial reporting standards BoardsTaxation guidelines FRSB is made up of NZICA membersBalance sheets and continuously aims to improve theIncome statements quality of general purpose financialClassification between equity statements and nonfinancial and liabilitystatements in aid of economic decisions Conceptual Framework New Zealand Securities CommissionDefinition of financial SC reportingDefinition of reportingEstablish under the securities entity act 1978Definition of user ofActs independently from the accounts and their NZ GOVT information needsDiscloses requirements ofObjectives of financial prospectuses for securities statements offered to the publicUnderlying assumptions Identifies essential principles to enhance accountabilityQualitative characteristics of financial statementsWants to strengthen investor confidence in nz capitalElements of financial market domestic and foreign statementsRecognition criteriaNew Zealand Exchange NZXMeasurement basis and techniquesSets uniform trading rules ethical standards and listing Framework requirementsThese are additional toGuides to the International accounting profession and accounting standards board legislationInternal consistency in IASBFailure to meet these rules standards lead to suspension of publicPoint off reference by listing stock financial statement preparers in absence of a specific increasementdecreasement in appropriate standard assetsliabilities other than contributions from the ownerPrecise terminologyReduce volume of standards Expensea decrease in future economicEnhance public confidence in benefits with a resulting decrease in equity financial statements not attributing to owners withdraws Users of General Purpose Financial Reports MeasurementPrimarycurrentpotential usersHistorical costFair value Secondaryemployees lenders suppliers customers governmentNet realisable value publicPresent value General Purpose Financial Reports Accrual Basisthe recognisation of when events occur not when cash changes handAnnual to produce Going Concernthe company is going toComply to frameworkIFRS continueCommon usersStandard statements IAS 1presentation of financial statementsForecasting who needs to prepare and what to prepare SPFR IAS 8accounting policies changes in accounting estimateserrorsMay comply with nz framework and accounting standards IAS 10Events after the reporting periodSpecific groups or specific purposeMay comply with IFRS IAS 38Accounting for intangibles must expense not capitalise Responsibility for and objective financial statementsresponsibility rests with Triple Bottom Line social reporting management and the objective is to provideProfit information that is useful to users inPeople economic decision makingPlanet Asseta resource controlled by the entity IAS 1 that derives from a past transaction has present control and future economic benefit Does not prescribe who must prepare financial statements rather their formatLiabilitya entitys obligation that derived from a past transaction has present Refer to legislation who must prepare obligation and future economic outflowsMust includestatement of financial position Equitythe residual interest in assets minus statement of comprehensive income liabilities statement of changes in equity statement of cash flows notes to the accountsIncomeincreases in economic benefit from inflows or outflows or
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