¶ … alternative accounting methods that have become increasingly popular. There are various merits and demerits of obtaining each of the accounting method for a firm however a company must choose the accounting method carefully as it proves to be a vital decision for the success of a company.
Accounting Methods are the guidelines and the basic rules based on which the businesses prepare and maintain their financial records. There have been a vast development in the accounting methods and practices over the years; however the two main accounting methods remain the same which are a) IRFS (International Financial Reporting Standards) b) U.S. GAAP (Generally Accepted Accounting Principle)
IRFS (International Financial Reporting Standards) were deigned to cater to the globalization of the businesses by providing an accounting method which is comparable and understandable beyond the regional boundaries. It was initiated to standardize the accounting methods for European nations by the European Council, the concept soon picked up pace and now is followed all around the world. U.S. GAAP (Generally Accepted Accounting Principles) is an accounting method accepted by the CPA Corporations and firms who adapt the guidelines and standards made by GAAP.
In recent times many companies have manipulated their earnings by adopting or switching to different accounting methods by remaining transparent to their shareholders. However this technique has also been abused by many as a tool for deceiving the investors and stakeholders. A change in the accounting method may cause a significant change in the tax payable, and the cash liabilities. It is important for a firm to follow the legal procedures in order to switch the accounting methods. The consent of the Commissioner is...
There are certain rules and regulations set by the International Revenue Service which makes sure that any firm is not able to deceive its shareholders and investors by providing a framework for the change in the method.
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GAAP poses great amount of challenges to new entrants and small players. The small businesses with limited resources always face a really tough time in order to meet the GAAP standards which will make it hard for the startup technology business to comply with the GAAP standards. It is the responsibility of a form to provide the accurate and relevant accounting information to its shareholders so that they can have a look at the true picture of the performance of the business. These financial statements serve as a monetary measure for the shareholders to decide on the performance and the future investment decisions and the management decisions as well.
Business managers can minimize the impact of the financial performances through the compliance with the correct and suitable accounting methods. It is important to understand for a firm to realize the benefits of the accounting methods and how the various models can work in their favor.
Small business should decide on an accounting method according to the legal form of the firm, credit policies, sales, tax policies etc. A certain part of record keeping is required by the law and tax policies; however the main benefit of meeting a particular international standard is that the managers can make useful strategic decisions based on those financial statements. The accounting methods can be changed but it is an extremely complex process therefore a small business should decide on an accounting method…
Accounting Theory Over the year, the world scholars continue to evaluate the economics of the world to understand their functioning. In this course, they developed the subject of accounting to assess the frameworks of financial principles. The accounting theory in discussion involves reviewing the historical foundations of financial reporting and creating new models of reporting the financial developments and exchanges (Richards, 2009, p. 17). Accounting theory evolves continually; thus, there are
Accounting standards and IFRS adoption in Cambodia and Thailand The significance of accounting standards Accounting may be considered as a business language through which the statistical results can be acquired which help in analyzing how well the firm is functioning. They give out timely statements of these statistics and help the stakeholders get all the information they need. Accounting is like a separate language which has its own grammar and these outlines
Alternative and Traditional Therapeutic Methods and Interventions: The Treatment of Children in Foster Care Children who live in a foster care environment often have emotional difficulties that must be dealt with by their caregivers. It is true that some of these children also have physical disabilities and ailments, but most of these physical problems can be handled more easily than some of the emotional scars that these children carry. Many of these
Wood was used more for recording, ink and seals were used to write accounts on top of a piece of wood. It was used mostly by everyone as it was inexpensive plus it was very easy to write on top of it. Marked stick also played many roles, also known as counting tally. But in fourteenth century, there was an argument for a decline in tallies and to increase
However, with budgeting, management can easily see how much money is available for projects and what the most pressing issues of the company are. Without the budget, the company is doomed as it is unable to account for its cash flow and revenue streams (Sullivan, 2003). Also, various financial models can be used to aid management. These tools can include sensitivity analysis and regression analysis. Sensitivity analysis in particular is
Accounting Standards Financial reporting practices and ethical standards in health care finance constitute the foundation of every successful organization. Healthcare organizations and other industries in the general market adopt Generally Accepted Accounting Principles (GAAP). The main objective behind this is to boost the organization's value by maintaining the integrity within and to leverage public trust. This paper summarizes the elements of financial management, GAAP and ethical standards in healthcare finance. Elements of