Professional Documents
Culture Documents
Dr Winston Kwok
Learning Objectives
Information System
Language of
Business
Standards for
Compliance
Purpose and Importance of Accounting
is a
Accounting Identifies
system that
Records
information
Relevant Communicates
that is
Reliable
to help users make
Comparable better decisions.
Purpose and Importance of Accounting
Identifying
Select transactions and events
Recording
Input, measure and classify
Communicating
Prepare, analyze and interpret
Users of Accounting Information
Shareholders
(Investors) Consumer Groups Managers Sales Staff
Lenders External Auditors Officers/Directors Budget Officers
(Creditors)
Customers Internal Auditors Controllers
Governments
External Users and Uses of Financial Information
BOOKKEEPING
(recording)
Financial Accounting versus
Tax Accounting
Ethics
Expense Recognition or
Matching Principle
Malaysia FRS
Australia
accounting
standards
China
accounting
standards
Europe
accounting
standards
IASBs Conceptual Framework
Assists in the development of future IFRS and review of
existing IAS/IFRS.
States the Qualitative Characteristics of financial
information that distinguish better (more useful)
information from inferior (less useful) information for
decision-making purposes.
GAAP
Conceptual
Framework
Conceptual Framework
2 Fundamental
Qualitative
Characteristics
4 Enhancing
Qualitative
Characteristics
Liabilities &
Assets Equity
Assets = Liabilities + Equity
Resources
Vehicles owned or
controlled Land
Store Buildings
Supplies
Equipment
Liabilities
Accounts Notes
Payable Payable
Creditors
claims on
assets
Taxes Wages
Payable Payable
Equity is Assets less Liabilities
At
beginning At end of
of period Time period
Statement of Statement of
Financial Financial
Position Position
Statement of Profit or Loss and
Other Comprehensive Income
Income Statement
Statement of Changes in Equity
Statement of Financial Position
Statement of Cash Flows
to Statement of
Changes in Equity
STATEMENT OF CHANGES IN EQUITY
The statement of changes in equity reports information about
how equity changes over the reporting period.
from Income
Statement
to Statement of
Financial Position
STATEMENT OF FINANCIAL POSITION
The statement of financial position describes a companys
financial position at a point in time.
from Statement of
Changes in Equity
from Statement of
Financial Position
Notes to the Financial Statements
Four general types:
* Summary of significant accounting policies:
assumptions, estimates, and judgments.
* Additional information about the summary totals in
financial statements.
* Disclosure of important information that is not
recognized in the financial statements.
* Supplementary information.
Full disclosure principle.