International Accounting And Financial Reporting Standards - amazonia.fiocruz.br

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Accounting or accountancy is the measurement , processing, and communication of financial and non financial information about economic entities [1] [2] such as businesses and corporations. Accounting, which has been called the "language of business", [3] measures the results of an organization's economic activities and conveys this information to a variety of users, including investors , creditors , management , and regulators. The terms "accounting" and " financial reporting " are often used as synonyms. Accounting can be divided into several fields including financial accounting , management accounting , external auditing , tax accounting and cost accounting. Financial accounting focuses on the reporting of an organization's financial information, including the preparation of financial statements , to the external users of the information, such as investors , regulators and suppliers ; [7] and management accounting focuses on the measurement, analysis and reporting of information for internal use by management. Even though accounting has existed in various forms and levels of sophistication throughout many human societies, and the double-entry accounting system in use today was developed in medieval Europe, particularly in Venice , and is usually attributed to the Italian mathematician and Franciscan friar Luca Pacioli. Financial statements are usually audited by accounting firms , [10] and are prepared in accordance with generally accepted accounting principles GAAP. International Accounting And Financial Reporting Standards.

International Accounting And Financial Reporting Standards Video

Overview of International Financial Reporting Standard (IFRS)

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They specify how companies must maintain and report their accounts, defining types of transactions, and other events with financial impact. IFRS were established to create a common accounting language so that businesses and their financial Accountibg can be consistent and reliable from company to company and country to country. IFRS are designed to bring consistency to accounting language, practices and statements, and to help businesses and investors make educated financial analyses and decisions.

The U. GAAP has been called "the gold standard" of accounting. However, some argue that the global adoption of IFRS would save money on duplicative accounting work, and the costs of analyzing and comparing companies internationally.

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IFRS covers a wide range of accounting activities. There are certain aspects of business practice for which IFRS set mandatory rules.

In addition to these basic reports, a company must also give a summary of its accounting policies. The full report is often seen side by side with the previous report, to show the changes in profit and loss. A parent company must create separate account International Accounting And Financial Reporting Standards for each of its subsidiary companies. For example, IFRS is not as strict on defining revenue and allows companies to report revenue sooner, so consequently, a balance sheet under this system might show a higher stream of revenue than GAAP's. FIFO means that the most recent inventory is left unsold until older inventory is sold; LIFO means that the most recent inventory is the first to be sold.

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IFRS originated in the European Union, with the intention of making business affairs and accounts accessible across the continent. The idea quickly spread globally, as a common language allowed greater communication worldwide. Although the U.]