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Introduction to Accounting Standards
In an organization financial statements are made to sum up the final result of all the business activities, it’s done in a particular accounting period and in monetary terms. The activities of this business are different from one another. To assess the financial statements of a variety of reporting companies poses some complications because of the dissimilarity in the methods and principles adopted by these companies in preparing financial statements. Standards are evolved to make these methods and principles standardized and comparable to the extent possible. These are used to make all the accounting principles standards so that evaluation can be done easily.
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The statements of the code of practice and performance of the regulatory accounting bodies that are to be observed and considered in the preparation and presentation of financial statements are what accounting standards mean. In other term, accounting standards are the documents which are written and issued by the expert institutes or other precise regulatory bodies covering a variety of aspects of treatment, extent, presentation and disclosure of various accounting dealings.
Need of Accounting Standards
The basic need of Accounting Standards is to get rid of differences in the treatment of many accounting aspects and to bring about consistency in the process. Their purpose is to balance the varied accounting policies are followed by the research and presentation of financial statements by different reporting organization.
Different Accounting Standard Bodies in Different Countries
There are different accounting standard body for different countries like
Australia – Australian Accounting Standards Board
USA – General Accepted Accounting Principles (GAAP)
UK – UK Accounting Standards Board
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