In Chapters 1 and 2 we introduced the fundamental issues in accounting, the potential users of accounting information and the requirements of these users. We were also concerned with ideas of value and profit and with various ways of measuring them. Chapters 3 and 4 analysed how accounting information is structured, recorded and processed in order to produce, among other things, statements such as the profit and loss account and balance sheet.
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Notes and References
- 1.ASC, ‘The Corporate Report — A discussion paper’ (London: Accounting Standards Committee, 1975).Google Scholar
- 2.Macve, R., ‘A conceptual framework for financial accounting and reporting’ (London: ICAEW, 1981).Google Scholar
- 3.IASC, ‘Framework for the preparation and presentation of Financial Statements’ (London: International Accounting Standards Committee, 1989).Google Scholar
- 4.The system of self-regulation has been frequently criticised as ineffective, and suggestions for a more formal, legally backed system have been proposed.Google Scholar
- 5.In 1988 a review committee recommended replacing the ASC with two bodies, a ‘Financial Reporting Council’ and an ‘Accounting Standards Board’, in order to separate policy from technical implementation: These two bodies formally took over from the ASC in August 1990. ‘The making of accounting standards’ (the Dearing Report) (London: Institute of Chartered Accountants of England and Wales, 1988).Google Scholar
- 6.However UK legislation requires companies to depart from the accounting rules in the Companies Acts where it is necessary in order to give a true and fair view. A true and fair view must therefore in some situations involve more than the mere application of accounting principles or legal rules.Google Scholar
- 7.Accounting Principles Board Statement, no 4, ‘Basic concepts and accepted accounting principles underlying financial statements of business enterprises’ (1970).Google Scholar
- 8.FASB, ‘Statements of Financial Accounting Concepts’ issued since 1973 as part of the ongoing conceptual framework project.Google Scholar
- 9.SFAC 1, ‘Objectives of Financial Reporting by Business Enterprises’ (Financial Accounting Standards Board, 1978).Google Scholar
- 10.SFAC 2, ‘Qualitative characteristics of accounting information’ (Financial Accounting Standards Board, 1980).Google Scholar