accounting1

• Abbreviations


  • GAAP - Generally Accepted Accounting Practice
  • IAS - International Accounting Standards
  • IASB - International Accounting Standards Board
  • IFRS - International Financial Reporting Standards
  • IFRSB - International Financial Reporting Standards Board
  • SAICA - South African Institute of Chartered Accountants
  • SAIPA - South African Institute of Professional Accountants
  • AFS - Annual Financial Statements
  • SOFP - Statement of Financial Position
  • SOCI - Statement of Comprehensive Income
  • SOCF - Statement of Cash Flows
  • VAT - Value Added Tax
  • BAE - Basic Accounting Equation
  • a/c - Account
  • BOY - Beginning of Year
  • EOY - End of Year
• Financial statements


  Disclose the results of an entity's financial performance and financial position
• Preparing financial statements


  1. Obtain source documents

  2. Record transactions in accounting records

  3. Prepare accounting reports

  4. Analyse and interpret financial statements

  5. Make business decisions
• IFRS


  • Developed by the International Accounting Standards Board (IASB) to provide a single set of high quality, understandable, enforceable and globally accepted international financial reporting standards
  • Take account of the financial reporting needs of emerging markets and small and medium sized entities
• IFRS are constantly under review for updating or replacement
• Purpose of IFRS


  • Set guidelines on how to disclose (show) particular items in the financial reports
  • Assist standard setters, preparers, auditors and users of financial reports
• Types of ownership in South Africa

  • Sole proprietor / sole trader
  • Partnership
  • Close corporation
  • Companies
• South Africa is represented on both the IASB and the IFRS Foundation
• When the IFRS Board came into existence they adopted all the IAS in use at the time and most are still in use today. Since then, new standards have been issued as the IFRS series. Standards are constantly under review for updating or replacement.
• International Financial Reporting Standards (IAS/IFRS statements)


  Set guidelines as to how a particular item should be disclosed (shown) in the financial reports
• Standards


  • Used to determine the minimum disclosure requirement
  • Aimed at assisting standard setters, preparers, auditors and users of financial reports
  • Labelled and numbered for ease of reference