ASR A2 - Accounting Regulations Assignment part 2 JI li...

This preview shows page 1 - 4 out of 6 pages.

Accounting Standard and Regulations Assignment part 2 JI li 11817309 Words: 960
Executive summary Financial statement is a significant stuff for both outsider and insider users. The purpose for outside users is to provide financial information by preparing financial statement, and the statement could help the investors to make investment decision. On the other hand, the inside user uses financial statement to make management decision to operate company better. That is the reason the accounting standards is important all accounting organization. Australian needs to adopt AASB 15 to obsolete the old accounting standard, which is AASB 111 and AASB 118. AASB 15 issued by international accounting standards board, Australia could reduce the inconsistency with this new accounting standard. The main difference between AASB 15 and AASB 118 is the revenue recognizing. Under AASB 15, a company needs to do 5 step to recognize the revenue by identify the performance obligation. Under the AASB 118, it recognizes revenue when receivable or received. To simplify the preparation of financial statement is another purpose of AASB 15, it reduces some requirement and retains the essential elements, and this makes it helpfully for emerging entity. AASB 15 could help company to obtain more capital. Introduction Accounting standard can facilitate the accounting staff to prepare a high-quality financial statement and convey much useful information to the users such as the performance and financial position of the reporting company. Generally, the primary
users of a financial statement are investors, managers, lenders and trader creditors or suppliers (WorldFinance 2015). These users need the financial statement to make some operation and investment decisions. Without accounting standard, there are some expectable additional costs would occur to the users of financial statement, because they need to do more work to verify and understand the relevant financial information. Accordingly, a high-quality financial statement not only can help user to make some right decisions, but also could overcome the information asymmetry to

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture