SSAP2

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi There!!<BR><BR>Does anyone out there know anything related to SSAP2? I'm trying to find out the four accounting concepts or conventions specified in SSAP2. Does any have a clue? Because i don't. And what is the "True and Fair" view that accountants have to applied to when coming towards this? (towards a company financial position)<BR><BR>I hope there is someone out there who knows something relating to this subject. Any websites you know relating to this would be helpful or an answer here would be great. If anyone wanted to email me i can be contacted on andrewlau2003@hotmail.com<BR><BR>God Bless Me...<BR><BR>Andrew<BR><BR>

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    SSAP2

    Hi Andrew,<BR><BR>After checking in my BBP book I have found out that SSAP 2 has been replaced by FRS18 since Dec 2000.<BR>The 4 concepts in ssap2 were: going concern, prudence, accruals and consistancy.<BR><BR>FRS 18 emphasises the importance of going concern and accruals calling them the bedrock of Financial Statements. Prudence and consistancy have been relegated to desirable elements of the Financial statement.<BR><BR>To give a true and fair view on the financial statements it is important that accounting policies remain consistant but baring in mind that retaining accounting policies which do not present the most useful information to the users of the accounts would also jeopardise the true and fair view. ie a balance must be reached between selecting the most appropriate policies and presenting coherent and useful financial statements.<BR><BR>I hope this helps and I hope i have written it in a coherent and useful manner,<BR><BR>Sarah
  • System
    System Posts: 100,534 🤖 Admin 🤖
    SSAP2

    In addition to the four fundamental concepts there is also the 5th., no netting off or separate statement of assets and liabilities.<BR><BR>True and Fair is a fascinating concept. It has been the subject of several barristers opinions and has been through the courts more than once.<BR><BR>It doesn't mean accurate or correct, given their normal meanings. The closest I could ever get is that it means 'close enough so that an informed user is not misled by any of the statements within the accounts.' A difference that would be misleading would be 'material'.<BR><BR>In the accounts of the multi national companies i.e. Ford, Edison, the F/S are sometimes stated in round millions of $, this means that a difference of half a million in rounding doesn't matter! This is also the reason why an audit report states 'in our opinion......true and fair' and doesn't certify a set of accounts.

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