FRS 18

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
currently going over june exam (FRA)have the answers but just wandering if anyone could give me a bit of explanation re:two objectives listed in FRS18? apparently the answers are two from the following:
Relevance,Reliability,Comparibility,Understandability.What the hell is it going on about??

All explanations gratefully received.

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:FRS 18

    The question is asking which factors you should consider when deciding on your accounting policies. The four you have listed are all common sense answers.

    Scott.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:FRS 18

    Hi

    FRS18 are the accounting concepts, ie the guidelines an accountant must adhere to.

    They are items such as relevance, prudence, materiality, accruals (matching concept),consistency, and a couple of others my brain can't remember at the moment!

    Basically when doing your job you need to make sure that when you present the figures that they are accurate, within the date range specified, items such as stock are not overstated, and the rates of depreciation for 1 particular item is consistent, ie you depreciate a car at 33.3% Reducing Balance, and continue to do so every year of it's life, without deciding 2 years later to depreciate it on a straight line basis.

    Sorry if I have rambled a bit and hope it makes some sense!

    Tracy

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