Understanding Financial Statements
Introduction, Review of Accounting Process & Financial Statements
Part I
• Generally Accepted Accounting Principles (US GAAP)
Generally Accepted Accounting Principles or U.S. GAAP refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally know as Accounting Standards. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing, and in the preparation of financial statements (Wikipedia, n.d.). Although quite flexible in guidelines, this framework is based upon certain constraints, principles to address specific necessities. U.S. GAAP is not the written law, they are flexible guidelines. However they are the standards used in the United States.
• International Accounting Standards (IFRS)
International Accounting Standards is a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements (Investopedia, n.d.). IFRS are issued by the International Accounting Standards Board. The International Accounting Standards or the International Financial Reporting Standards are standards and guidelines used by nearly 100 countries. Many of the standards forming part of the IFRS are know by the older name IAS. Many countries use these standards and many do not. The International Accounting Standards Board is a committee that is trying to develop global accounting standards. The IASB has developed procedures that brings transparency, predictability, and consistency of this committee is to create global standards that are transparent, enforceable, understandable, and of high quality. These standards would be a very important step in the accounting world. The use of these standards would provide more informative financial reports with greater clarity and consistency and easily understandable with high quality.
• Norwalk Agreement (October 2002)
Norwalk Agreement refers to a Memorandum of
Part I
• Generally Accepted Accounting Principles (US GAAP)
Generally Accepted Accounting Principles or U.S. GAAP refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally know as Accounting Standards. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing, and in the preparation of financial statements (Wikipedia, n.d.). Although quite flexible in guidelines, this framework is based upon certain constraints, principles to address specific necessities. U.S. GAAP is not the written law, they are flexible guidelines. However they are the standards used in the United States.
• International Accounting Standards (IFRS)
International Accounting Standards is a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements (Investopedia, n.d.). IFRS are issued by the International Accounting Standards Board. The International Accounting Standards or the International Financial Reporting Standards are standards and guidelines used by nearly 100 countries. Many of the standards forming part of the IFRS are know by the older name IAS. Many countries use these standards and many do not. The International Accounting Standards Board is a committee that is trying to develop global accounting standards. The IASB has developed procedures that brings transparency, predictability, and consistency of this committee is to create global standards that are transparent, enforceable, understandable, and of high quality. These standards would be a very important step in the accounting world. The use of these standards would provide more informative financial reports with greater clarity and consistency and easily understandable with high quality.
• Norwalk Agreement (October 2002)
Norwalk Agreement refers to a Memorandum of
References: IFAC. (2011, September 9). Retrieved September 10, 2011, from http://ifac.org/IAASB/ Investopedia. (n.d.). Retrieved Septmeber 10, 2011, from http://www.investopedia.com/terms/i/ifrs/asp#ixzz1XbKvE5Zt Investopedia. (n.d.). Retrieved September 10, 2011, from http://www.investopedia.com/terms/g/gaas.asp#ixzz1XbJJsdzl Kumar, S. (n.d.). Sooperarticles. Retrieved September 11, 2011, from Apple Inc History: http://www.sooperarticles.com/technology-articles/apple-inc-history-3733.html Swatch Group. (2011, Septmeber 11). Retrieved September 11, 2011, from Swatch Group History: http://www.swatchgroup.com/en/group_profile/history/today Wikipedia. (n.d.). Retrieved September 10, 2011, from http://en.wikipedia.org/wiki/Generalyy_Accepted_Accounting_Principles Wikipedia. (n.d.). Retrieved September 10, 2011, from http://en.wikipedia.org/wiki/Norwalk_Agreement Wikipedia. (n.d.). Retrieved September 11, 2011, from Nikon: http://en.wikipedia.org/wiki/Nikon