Above-the-line entries refer to those listed above the horizontal line on a company's profit and loss account, reflecting normal business activities. This accounting practice is critical for understanding how a company's earnings are generated.
Organizations, established worldwide, to regulate the activities of accountants. Members are entitled to use various professional titles such as Chartered Accountant, Chartered Certified Accountant, or Certified Public Accountant. Membership is controlled by examination, and compliance with the body's regulations is expected.
AFAANZ is a key professional association formed in 2002 representing the interests of those involved in finance and accounting education across Australia and New Zealand.
The Accounting Council is a body established to provide advice on accounting and financial reporting policies, aiding the Financial Reporting Council (FRC) in the development of Financial Reporting Standards.
Accounting principles are the fundamental rules, concepts, and guidelines governing currently accepted accounting practices and procedures. They form the foundation upon which financial transactions are recorded and reported, ensuring consistency, reliability, and comparability of financial statements.
Accounting principles are the foundation rules and guidelines that companies must follow when reporting financial data, ensuring consistency, transparency, and comparability of financial statements.
The Accounting Principles Board (APB) was the authoritative body that preceded the Financial Accounting Standards Board (FASB) in the USA. Established in 1959 by the American Institute of Certified Public Accountants (AICPA), it issued 31 Opinions that significantly contributed to the theory and practice of accounting and continue to influence Generally Accepted Accounting Principles (GAAP).
The Accounting Principles Board (APB) was the authoritative body of the American Institute of Certified Public Accountants (AICPA) charged with the establishment of accounting principles and the promotion of consistency and improvement in the field of financial accounting and reporting.
Accounting profit refers to the amount of profit calculated using generally accepted accounting principles (GAAP) rather than tax rules. It represents the revenue for an accounting period less the expenses incurred, utilizing the concept of accrual accounting. There are several theoretical and practical challenges in determining this profit, leading to a certain variability in its measure.
Formerly known as the Financial Reporting Release, Accounting Series Releases (ASRs) were publications by the U.S. Securities and Exchange Commission (SEC) that discussed policies and procedures related to financial reporting and accounting standards in the USA.
The Accounting Standards Board (ASB) was the recognised body for setting accounting standards in the UK from its establishment in 1990 until its functions were subsumed under the Financial Reporting Council (FRC) in 2012.
Accumulating compensated absences refer to employee benefits that an organization must account for, representing the amount accrued but not yet taken by employees.
All-purpose financial statements, also referred to as general purpose financial statements, are prepared with the objective of providing financial information that is useful to a wide range of users in making economic decisions.
The abbreviation ASB can refer to two distinct financial terms: the Accounting Standards Board, which oversees the development and implementation of accounting standards, and asset-backed security, a financial instrument backed by an underlying asset.
The Accounting Standards Committee (ASC) is a significant entity responsible for establishing and maintaining accounting standards to ensure consistency, transparency, and reliability in financial reporting.
Asset classification refers to the systematic categorization of assets on a balance sheet, distinguishing between fixed and current assets as mandated by the Companies Act and Financial Reporting Standard (FRS 102) in the UK and Republic of Ireland.
An adjustment to the book value of an asset to reflect its current market value; seldom allowed under Generally Accepted Accounting Principles (GAAP).
An audit completion checklist is a crucial tool used by audit staff to ensure that the financial statements being audited provide a true and fair view in compliance with statutory disclosures and accounting standards.
A Balance Sheet Audit focuses specifically on verifying the existence, ownership, valuation, and presentation of a company's assets and liabilities as stated in the balance sheet.
Big GAAP refers to the generally accepted accounting principles (GAAP) applied to large entities. It encompasses a comprehensive set of accounting standards used globally to ensure consistency, reliability, and transparency in the financial statements of large corporations.
An essential figure representing net profit after tax, utilized in financial performance metrics such as earnings per share.
The Confederation of Asian and Pacific Accountants (CAPA) is an organization that represents professional accountancy bodies in the Asia-Pacific region, facilitating cooperation and advancing accounting standards.
CASE is an acronym for the Committee on Accounting for Smaller Entities. This organization focuses on the creation and adaptation of accounting standards and practices to better suit the needs of smaller entities, ensuring that they are adequately represented and that their financial reporting is manageable and effective.
Short-term, highly liquid investments that are capable of being converted into known amounts of cash without notice, typically maturing within three months when acquired.
The Chart of Accounts (CoA) is a detailed listing of all the individual accounts used by an organization’s accounting system, providing a structured framework for categorizing transactions and financial data.
Chartered Accountants Ireland (CAI) is the largest and oldest professional accounting body in Ireland, focusing on the advancement of accounting knowledge, standards, and professional ethics.
The Canadian Institute of Chartered Accountants (CICA) is a professional body representing chartered accountants in Canada, providing guidance, setting regulatory standards, and promoting the integrity and competence of the profession.
The Closing-Rate Method, also known as the Net-Investment Method, involves restating balance sheet figures into another currency using the closing rate of exchange for all assets and liabilities as of the balance-sheet date.
The Code of Ethics for Professional Accountants established by the International Ethics Standards Board for Accountants (IESBA) provides a global framework for the ethical conduct of accounting professionals.
A statement of theoretical principles that provides guidance for financial accounting and reporting. It serves as a foundation for setting accounting standards and provides a coherent system of interrelated objectives and fundamentals.
A document setting out the basic accounting concepts informing International Accounting Standards and International Financial Reporting Standards, serving as a guide in the preparation and presentation of financial statements.
Constant Purchasing Power Accounting (CPPA) involves adjusting financial statements to account for changes in the purchasing power of money over time due to inflation or deflation. This method adjusts for the distortions caused by inflation, ensuring that financial information remains accurate and comparable.
The Consultative Committee of Accountancy Bodies (CCAB) is a collaborative umbrella group set up in 1970 by the six main accountancy bodies in the UK and Ireland to foster cooperation and address financial accounting and reporting issues.
Contingencies in accounting refer to potential gains and losses that are known to exist at the balance-sheet date. These outcomes will only be known after one or more future events occur or do not occur. The way these contingencies are handled in financial statements depends on their nature, and specific accounting standards provide the required guidance.
Corporate reports are comprehensive packages of information that describe the economic activities of an organization. For limited companies, these typically take the form of annual reports and accounts, aimed at providing stakeholders with a detailed view of the company's financial health.
Current Value Accounting (CVA) is a method aimed at providing an income statement and balance sheet in terms of current dollars, enhancing the quality of financial information during times of inflation.
Defective Accounts refer to financial records that do not comply with legislative or accounting standards, necessitating revision as per the Companies Act.
Deprival value is an accounting concept reflecting the loss that a company would experience if an asset were deprived or removed, often aligned with current-cost accounting.
A development stage enterprise is an enterprise devoting substantially all of its efforts to establishing itself. Either the planned principal operations have not started, or there has been no significant revenue even though principal operations are underway.
Disclosure involves the provision of financial and non-financial information to stakeholders interested in the economic activities of an organization. It is standard practice for transparency and accountability in modern businesses.
Discontinued operations refer to components of a business that have been sold or permanently closed down, and their financial results are separated from continuing operations for reporting purposes.
In the USA, a Discussion Memorandum is a preliminary document published by the Financial Accounting Standards Board (FASB) before issuing a Statement of Financial Accounting Standards (SFAS). It specifies the topic under consideration, describes the alternative accounting treatments, and explains the perceived advantages and disadvantages of each treatment.
EFRAG is an acronym for the European Financial Reporting Advisory Group, an organization dedicated to the development and objectives of financial reporting standards in the European Union.
The Emerging Issues Task Force (EITF) was formed by the Financial Accounting Standards Board (FASB) with the purpose of providing assistance in identifying and implementing reporting issues in new and developing financial practices.
Emerging Issues Task Force (EITF) is responsible for assisting the Financial Accounting Standards Board (FASB) by suggesting appropriate treatments for emerging accounting issues and practices to accelerate standard-setting processes.
EU-adopted IFRS (International Financial Reporting Standards) are the IFRS standards as issued by the International Accounting Standards Board and adopted for use within the European Union. These standards may differ in details from the global IFRS.
Fair Value Accounting involves the valuation of financial obligations according to pricing models rather than their current market price, especially when there's no active market presence.
The Financial Accounting Standards Advisory Council (FASAC) serves as an advisory body to the Financial Accounting Standards Board (FASB) on matters related to accounting standards, offering broad perspectives from diverse financial communities, ensuring comprehensive and sustainable financial reporting standards.
FCA stands for both the Financial Conduct Authority and Fellow of the Institute of Chartered Accountants in England and Wales. Each represents significant entities in the realms of finance regulation and professional accounting standards, respectively.
Financial accounting is the branch of accounting concerned with classifying, measuring, and recording the transactions of a business, ultimately presenting the performance and financial position of a business through standardized financial statements.
In the USA, a council that advises the Financial Accounting Standards Board (FASB) on agenda-setting and accounting standards to ensure the relevance and quality of financial reporting.
The Financial Accounting Standards Board (FASB) is an independent organization that establishes and improves standards of financial accounting and reporting for companies and non-profit organizations in the United States.
The Financial Accounting Standards Board (FASB) is a private, non-governmental organization established in 1973 to develop and issue standards for financial accounting and reporting. These standards are commonly referred to as Generally Accepted Accounting Principles (GAAP).
The Financial Reporting Council (FRC) is a UK body set up in 1990 to promote high-quality corporate governance and financial reporting.
The Financial Reporting Council (FRC) is a regulatory body established to oversee the accounting, auditing, and actuarial professions, ensuring high standards in financial reporting and corporate governance.
Financial Reporting Exposure Draft (FRED) is a document issued by the Financial Reporting Council (FRC) for discussion and debate prior to the issuance of a Financial Reporting Standard (FRS).
The Financial Reporting Review Panel (FRRP) monitors the accounting practices of public and large private companies in certain jurisdictions to ensure compliance with legal and regulatory financial reporting requirements.
The Financial Reporting Review Panel (FRRP) is an essential entity tasked with upholding the integrity and quality of financial reporting by examining and ensuring compliance with reporting standards.
A comprehensive overview of the Financial Reporting Standard (FRS), a set of standards developed by the Accounting Standards Board and Financial Reporting Council to guide financial reporting practices in the UK and Republic of Ireland.
The Financial Reporting Standard for Smaller Entities (FRSSE) was a former accounting standard by the Accounting Standards Board (ASB). It provided simplified financial reporting requirements for small entities.
The Financial Reporting Standard for Smaller Entities (FRSSE) offers a simplified and less burdensome framework tailored to smaller companies, ensuring compliance with financial reporting requirements while reducing complexity and administrative effort.
The Framework for the Preparation and Presentation of Financial Statements, also known as the Conceptual Framework for Financial Reporting, provides the foundation for setting accounting standards and deciding how to resolve accounting issues.
The currency of the immediate economic environment in which an entity operates, i.e. the one in which it earns and spends cash and which chiefly determines its costs and prices. This will sometimes differ from the currency in which its accounts are presented (the presentation currency), especially where the entity is part of a multinational group.
Fundamental accounting concepts are the core principles that underpin the practice of accountancy, shaping the integrity, consistency, and efficiency of financial reporting.
The Governmental Accounting Standards Board (GASB) is an independent, private-sector organization that sets accounting and financial reporting standards for U.S. state and local governments.
General purpose financial statements are annual accounts and reports prepared by companies to serve the needs of a wide range of users, often regarded as compromise documents.
Generally Accepted Accounting Principles (GAAP) are a common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements. GAAP’s objective is to ensure that financial reporting is transparent and consistent from one organization to another.
Conventions, rules, and procedures that define accepted accounting practice, including broad guidelines as well as detailed procedures, ensuring consistency and transparency in financial reporting.
Generally Accepted Accounting Principles (GAAP) are a common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements. GAAP is a combination of authoritative standards set by policy boards and common accounting procedures accepted across the industry.
US GAAP refers to the accounting rules, standards, and concepts that guide US accountants in measuring, recording, and reporting financial transactions.
A government grant is a financial award provided by a government body to an organization to support activities that are deemed socially or economically beneficial. These grants can be either revenue-based or capital-based and have specific accounting treatments according to Financial Reporting Standards.
The Governmental Accounting Standards Board (GASB) is an independent, private-sector organization in the United States, responsible for establishing and improving accounting and financial reporting standards for U.S. state and local governments. The GASB operates under the oversight of the Financial Accounting Foundation (FAF).
Held-for-sale is a classification of non-current assets introduced by the International Accounting Standard 5 (IAS 5), Non-current Assets Held for Sale and Discontinued Operations. Assets classified as held-for-sale must be available for sale in their present condition and the sale is expected to be completed within one year.
The International Auditing and Assurance Standards Board (IAASB) establishes and promotes high-quality international standards for auditing, assurance, and related areas, aiming to enhance the quality and consistency of practice across the globe.
The International Accounting Standards Board (IASB) is the independent, private sector body that develops and approves International Financial Reporting Standards (IFRS). The IASB was formed to achieve transparency, accountability, and efficiency in financial markets around the world through consistent and high-quality accounting standards.
The IASC Foundation, now known as the IFRS Foundation, was established to oversee and develop a globally accepted set of accounting standards known as International Financial Reporting Standards (IFRS).
An ideal standard in standard costing represents a cost, income, or performance benchmark set to be achieved only under the most favorable conditions. It contrasts with expected standards, which are more attainable.
The IFRS Advisory Council is a formal advisory body that provides strategic advice and counsel to the International Accounting Standards Board (IASB) and the Trustees of the IFRS Foundation on the development and implementation of International Financial Reporting Standards (IFRS).
A comprehensive look at inflation accounting, its definition, examples, related terms, FAQs, online resources, and suggested books for further studies.
The ICAEW (Institute of Chartered Accountants in England and Wales) is a professional membership organization that promotes, develops, and supports more than 150,000 chartered accountants worldwide. It provides qualifications, educational resources, advocacy, and maintains high standards in accounting practice.
The International Accounting Education Standards Board (IAESB) is dedicated to developing high-quality accounting education standards embraced by the global community.
International Accounting Standards (IAS) are issued by the International Accounting Standards Board (IASB) to standardize accounting principles and procedures across different countries to enhance comparability and transparency in financial statements.
A comprehensive guide to the International Accounting Standards (IAS) issued by the International Accounting Standards Committee (IASC) and maintained by the International Accounting Standards Board (IASB).
The London-based privately funded organization responsible for developing a single set of high-quality, understandable International Financial Reporting Standards (IFRS) for general-purpose financial statements.
An independent, privately funded organization responsible for developing and promoting international accounting standards to ensure high quality and comparable financial reporting globally.
The International Accounting Standards Committee (IASC) was an independent private-sector body that created and issued international accounting standards. Its purpose was to develop and promote international accounting standards through consensus-building. The IASC has since been replaced by the International Accounting Standards Board (IASB), under the International Financial Reporting Standards (IFRS) Foundation.
The International Accounting Standards Committee Foundation (IASCF) was an independent, private-sector organization responsible for developing a single set of high-quality, understandable, and enforceable international financial reporting standards through its standard-setting body, the International Accounting Standards Board (IASB).
The International Financial Reporting Interpretations Committee (IFRIC) assists the International Accounting Standards Board (IASB) by providing guidance on the application and interpretation of International Financial Reporting Standards (IFRS).
International Financial Reporting Standards (IFRS) are a set of international accounting standards issued by the International Accounting Standards Board (IASB) since 2001, aimed at creating consistent financial statements that are comparable across international boundaries.
International Financial Reporting Standards (IFRS) are a set of accounting standards developed and maintained by the International Accounting Standards Board (IASB). They aim to provide a common global language for business affairs so that company accounts are understandable and comparable across international boundaries.
The IFRS-AC is a council of diverse experts who advise the IASB on setting global accounting standards, ensuring these standards are relevant and practical for financial statement users and preparers.
Intragroup transactions refer to business dealings, including sales, loans, and other financial activities, that occur between different divisions, subsidiaries, or entities within the same corporate group. These transactions need to be carefully managed and recorded to ensure accurate financial reporting and regulatory compliance.
The International Public Sector Accounting Standards Board (IPSASB) is a global standard-setting body responsible for developing and promoting the adoption of International Public Sector Accounting Standards (IPSAS) to enhance the quality and transparency of public sector financial reporting.
A lease is a contractual agreement in which a lessor grants the lessee the right to use an asset for a specified period in return for specific rental payments. While the lessor retains ownership rights, the lessee gains usage rights.
The designation LIAB stands for Licentiate of the International Association of Book-keepers, a professional accreditation that recognizes the expertise and skills of bookkeepers affiliated with the IAB.
The method of presenting an asset in the balance sheet where the asset linked to financing is shown gross, with the financing deducted within a single asset caption.
Long-term debtors refer to individuals or entities that owe money to an organization but are not expected to make payment within the near future, typically beyond a 12-month period.
The 'Lower of Cost or Market (LCM)' principle is a conservative accounting convention that dictates that inventory should be reported at either its historical cost or its current market price, whichever is lower.
The Lower of Cost or Market (LCM) accounting method involves recording inventory at its historical cost but writing it down to market value if that is lower. Market value is defined as replacement cost, capped by net realizable value (NRV) and cannot be less than NRV minus a normal profit margin.
Merger accounting is a method that treats two or more businesses as combining on an equal footing. It's favored in scenarios of group reconstruction where it's applied without restating net assets to fair value.
