Monthly Archives: November 2024

What is a principle of conservatism in accounting?

Conservatism Principle also known as the “Prudence Concept” states gains should be recorded if their occurrence is certain but losses with a remote chance are recognized. The conservatism principle in accounting is a guideline that requires accountants to be cautious and conservative when preparing financial statements. As per this guideline, when faced with two options,…

What is a Double Entry System in Bookkeeping or Accounting?

Italian monk Luca Pacioli is known as “the father of accounting”. He published a textbook called “Summa de Arithmetica, Geometria, Proportioni et Proportionalita” in 1494. In the said huge math encyclopedia written by him he included an instructional section on double-entry bookkeeping. The three golden rules of accounting are (1) debit all expenses and losses,…

Overview of IFRS: The International Financial Reporting Standards

IFRS Accounting Standards are developed by the International Accounting Standards Board (IASB) an independent, not-for-profit organization that develops and approves International Financial Reporting Standards (IFRSs). The IASB established in 2001 operates under the oversight of the IFRS Foundation. IFRS was created to establish a common accounting language that forms accounting rules for public companies to…

Understanding Generally Accepted Accounting Principles of USA (GAAP)

Accounting standards in the USA are a set of accounting guidelines known as Generally Accepted Accounting Principles (GAAP). These standards govern how companies in the United States record and present their financial statements to regulatory authorities, investors, and all stakeholders. The Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB) developed and…

Accounting Standards in India and its Definition and Scope

Accounting standards in India are guidelines that govern how companies record and present their financial statements to regulatory authorities, investors, and all stakeholders. The Institute of Chartered Accountants of India (ICAI) is a statutory body established by an Act of Parliament, the Chartered Accountants Act, 1949 (Act No. XXXVIII of 1949) for the regulation and…

Origins of Accounting Principles or Concept of accounting

The Italian Luca Pacioli, recognized as The Father of accounting and bookkeeping was the first person to publish a work on double-entry bookkeeping, and introduced the field in Italy. The modern profession of the chartered accountant originated in Scotland in the nineteenth century. The main purpose of accounting principles is to guarantee that a business’s…

New Accounting system / Value system accounting

The days of manual bookkeeping and ledgers are long gone as emerging technologies in accounting include AI-driven automation, blockchain for secure transactions, cloud-based accounting software, data analytics, and robotic process automation for streamlining repetitive tasks. These emerging technologies have revolutionized traditional accounting practices. Automation is allowing accountants to eliminate or streamline tedious manual tasks like…