Accountancy/Financial Accounting/IFRS

IASB The most common financial accounting standard. Conceptual Framework The framework is not a Standard The main goals of the framework are: Objectives of financial statements Identification of characteristics to ensure quantitative information in the statements. Explain the procedure of recognizing and measuring elements of financial statements Assets An asset is a unit of resource under control of an entity result in economic benefits inflow rose from past event. THERE are 3 essentials: The resource must contain future economic benefits The entity must have control over the future economic benefits There must be a past event Liabilities An liability is present obligation of the entity rose from past event. Present obligation is one of the 3 essentials; giving up resources;past transaction or event Income Expenses Tax Purpose The tax-effect accounting desire to identify net tax-effect of all perodic transactions recognised. Because tax purpose is different from accounting purpose, as there are several accounts not possible posted to Tax department, e.g. There 2 methods: Current Tax Determines current tax liability Analyses differences between accounting and taxable profit Current tax worksheet Deferred Tax Determines net effect of deferred taxes and deductions arising from current period transactions Analyses differences between accounting and tax balance sheets Deferred tax worksheet