Statements of Accounting Standards by the NASB

Topics: Balance sheet, Generally Accepted Accounting Principles, Taxation Pages: 34 (8547 words) Published: January 4, 2011


The statements of Accounting Standards (SAS) are issued by the Nigerian Accounting Standards Board (NASB) for use by all those interested in published financial statements either as preparers or users. The NASB is a thirteen member body comprising the following organisations and establishments: ♣ Central Bank of Nigeria (CBN)

♣ Corporate Affairs Commission (CAC)
♣ Federal Board of Inland Revenue (FBIR)
♣ Federal Ministry of Finance (FMF)
♣ Federal Ministry of Commerce and Tourism (FMCT)
♣ Nigerian Accounting Teachers’ Association (NATA)
♣ Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) ♣ Nigerian Deposit Insurance Corporation (NDIC)
♣ Nigerian Stock Exchange (NSE)
♣ Securities and Exchange Commission (SEC)
♣ The Chartered Institute of Bankers of Nigeria (CIBN)
♣ The Institute of Chartered Accountants of Nigeria (ICAN) ♣ The Office of the Auditor General for the Federation.

Standards Issuing Procedure
Prior to the issuing of any standard, a great deal of preparatory work is required which would culminate in the publication of an exposure draft. Copies of the exposure draft are sent to members and those with a special interest in the topic. After full and proper consideration and consultation, if it is seen to be desirable, an accounting standard on the topic may then be issued. In Nigeria, the SAS has precedence over other foreign standards including International Accounting Standards (IAS). Each SAS however indicates the level of compliance with the relevant IAS.

SAS 1 – DISCLOSURE OF ACCOUNTING POLICIES (Issued Nov 1984) The purpose of this statement is to assist any reader in the understanding and the interpretation of financial statements and the information disclosed therein.

Accounting method – is the medium through which accounting concepts are applied to financial transactions and to the preparation of financial statements.

Accounting Basis – the totality of methods adopted by an enterprise for applying fundamental accounting concepts to its financial transactions. There are two distinctive accounting bases: i) Accrual basis; and

ii) Cash basis.

Accounting Policies – accounting policies are those bases, rules, principles, conventions and procedures adopted in preparing and presenting financial statements.

Accounting concepts identified by the standard are: Entity, going concern, periodicity, realisation, matching, consistency, and historical cost.

Accounting principles are employed in applying accounting concepts are: substance over form, objectivity, fairness, materiality, and prudence.

SAS 2 – INFORMATION TO BE DISCLOSED IN FINANCIAL STATEMENTS (Issued Nov 1984) This standard requires that financial statements should provide quantitative and qualitative information to aid users in making informed economic decisions.

Terms and meanings
Accounting information – refers to the data that are found in financial statements. Accounting Period – refers to the time span, usually one year, covered by financial statements Financial Statement – consists of balance sheet, profit and loss account or income statement, notes on the account, cash flow statement, value added statement and historical financial summary. Long term – relates to a period in excess of 12 months.

General Disclosures:
The financial statements of an enterprise should state:
a) The name of the enterprise
b) The period of time covered
c) A brief description of its activities
d) Its legal form and
e) Its relationship with its significant local and overseas suppliers including the immediate and ultimate parent, associated or affiliated company.

SAS 3 ACCOUNTING FOR PROPERTY, PLANT AND EQUIPMENT (Issued Nov 1984) This statement deals with accounting for property, plant and equipment under the historical cost concept and the revaluation of specific items of property, plant and equipment....
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