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It should be comparable over time, so that the over information in the financial statements for one year can be compared with previous years.
The result of past events Assets result from past transactions or other substance past events.
It must disclose: that management substance has over concluded that the financial statements present over fairly the entitys financial position, financial performance and cash flows; that it has complied with applicable standards and interpretations, except that it has departed from a particular requirement to achieve a fair presentation;.
The other significant advantage of historical cost accounting is that it is understandable and easy to apply.
(b) define a construction contract and discuss the role of accounting concepts in the recognition of profit.3 Preparation of consolidated financial statements including an associate (a) prepare a consolidated statement of financial position for a simple group (parent and one subsidiary) dealing with pre and post acquisition over profits, minority interests over and consolidated goodwill.(b) compare the usefulness of cash flow information with that of an income statement or statement of comprehensive income.It states that revenue is recognised in the income statement when: there is an increase in future economic benefits related to an increase in an asset or a decrease in a liability, and this increase in economic benefits can be reliably measured.Disadvantages of current value accounting Current value is subjective and therefore less reliable than historical cost.
This may not be the case.
Chapter 2: Recognition and measurement EWP Go to crack m for insaniquarium Q/As, Notes Study Guides 47 Current value accounting assumes that the business intends to replace all its existing assets.
Materiality provides a threshold or cut-off point, and information is not relevant if it is immaterial ( not material).
This means that preparers must observe the principle of substance over form by recognising the economic over kong substance of transactions where this is different from playstation their legal form.
CPP also enables meaningful comparisons to be made between the financial statements of different entities.It has confirmatory value if it helps users to confirm the assessments and predictions they have made in the past.Questions may ask candidates freeware to comment on the appropriateness or acceptability of managements opinion or chosen accounting treatment.We therefore offer you the following tailored package: acca Distance Learning Courses Learn quickly and efficiently crack Access to our dedicated distance learning website where youll find a regular blog from the distance learning department reminders, hints and tips, study advice and other ideas from tutors.No sale has taken place.Losses include for example, the loss on disposal of a non-current asset, and losses arising from damage due to fire or flooding.3.1 Understandability Information in financial statements must be readily understandable to users.It can also be argued that a conceptual framework strengthens the credibility of financial reporting and the accounting profession in general.