Assalamoalaikum to all members.
I an a new member and student of accountancy. Can any one send me the following Concepts/principles with Concreate Reference (IAS, IFRS, IFAC) with examples if possible.
Principle of Going Concern.
Principle of Materiality.
Prudence Concept.
Consistency.
Revenue Recognizing Methods.
I shall be grateful to you.
Regards
Muhammad Tayyab
I am not an advanced level student but I will try to explain a little.
<u><center>GOING CONCERN</center></u>
Going concern means that an organization will work in future so it maintains accounts keeping in mind "going concern". Fixed assets and longterm liabilities are simplest example.
<b>I remember that in one of ACCA 1.1 exam there was a question that if a company is going to be desolved, what will be its effect on Fixed Assets.
It means that "going concern" is no more there so Fixed Assets will become Current Assets.</b>
<u><center>PREDENCE CONCEPT</center></u>
It meanse being carefull in situation of uncertainity. Recording inventory at lower of cost and NRV is the best example. If PC were ingored, inventory would be recorded at cost.
<u><center>CONSISTENCY</center></u>
It is also a simple one. Unless you are forced to do so, don't change the way you are treating a transaction such as depreciation method. If you are following straight line method, keep following it unless you have a geniun reason to change it that may be legal restriction, better presentation etc.
<u><center>Materiality</center></u>
Materiality effects the presentation of Financial statements. An item is material if it can influance the decision of user. You can judge materiality through the nature and size of an item. A material item should/must be shown in the F/S.
<u><center>REVENUE RECOGNITION</center></u>
There are conditions on when to rec. a revenue for which you have to consult a book but for know keep in mind that revenue is recognized when it is 100% "certain".
For more detail study IAS 1 Presentation of F/S
in june the FOH idle capacity was 800 favourable and spending variance was zero actal FOH was 9000 for an output of 700tons
july the FOH idle capacity was zero and spending variance was 500 unfavourable FOD was 7500 for a 500 ton output
August output was 400 tons actualFOH was 5900 and the budget allowance was 6000
anyone can do the variance analysis for each ofthe 3 months i will b very thanx ful to u