01-09-2006, 10:01 PM
<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Muhammad Zahid</i>
<br />NRSP is a big organisation they would have proper accounting policies but i am talking about small and medium size organisations where financial policies cease to exist. For instance i evaluated a medium size organisation in Lahore where they were not keeping the record of Fixed Assets rather they were expense out the entire amount of their capital and Medical equipment in the year of purchase. They just maintaining receipt and Payment Account and their auditor still manage to prepare Balance sheet with fixed assets schedule.
I wish to know that is it in accordance with the prevalent rule and regulation and IAS. If not where they have made departure from the said IAS
Zahid
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Its not only the case with small NGOs/NPOs, many of the small entities are in the same practice.
As far as the non compliance is concerend. Such organizations are voilating the essence of the Framework to the International Accounting Standards, they are non compliant with the requirments of IAS 16. According to the Framework, non compliance with any Standard means that Financial Statemnts are not prepared in line with the prevailing IAS in the country. Strictly speaking treating capital expenditure (fixed assets)as running expenditue is against the matching concept, becoz charging it in the year of purchase to P&L doesnt match with economic benefits expected to arise from it over several years, so thats y assets r depreciated over the years inorder to match the depreciation expense with the economic benefits expected to flow from them to the entity over the years.
Not maintaining proper records of fixed assets results in non compliance with TR 6 of ICAP which is issued pursuant to section 230 of the Companies Ordinance, 1984.
ICAPians, the unparalleled..
<br />NRSP is a big organisation they would have proper accounting policies but i am talking about small and medium size organisations where financial policies cease to exist. For instance i evaluated a medium size organisation in Lahore where they were not keeping the record of Fixed Assets rather they were expense out the entire amount of their capital and Medical equipment in the year of purchase. They just maintaining receipt and Payment Account and their auditor still manage to prepare Balance sheet with fixed assets schedule.
I wish to know that is it in accordance with the prevalent rule and regulation and IAS. If not where they have made departure from the said IAS
Zahid
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Its not only the case with small NGOs/NPOs, many of the small entities are in the same practice.
As far as the non compliance is concerend. Such organizations are voilating the essence of the Framework to the International Accounting Standards, they are non compliant with the requirments of IAS 16. According to the Framework, non compliance with any Standard means that Financial Statemnts are not prepared in line with the prevailing IAS in the country. Strictly speaking treating capital expenditure (fixed assets)as running expenditue is against the matching concept, becoz charging it in the year of purchase to P&L doesnt match with economic benefits expected to arise from it over several years, so thats y assets r depreciated over the years inorder to match the depreciation expense with the economic benefits expected to flow from them to the entity over the years.
Not maintaining proper records of fixed assets results in non compliance with TR 6 of ICAP which is issued pursuant to section 230 of the Companies Ordinance, 1984.
ICAPians, the unparalleled..
