Академический Документы
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Contact Details
Course Co-ordinator/Lecturer
Kevin Simpkins, Adjunct Professor RH 716 Phone: 463 9651 Email: kevin.simpkins@vuw.ac.nz Dr Thu Phuong Truong, Senior Lecturer RH 615 Phone: 463 5233 Ext 8961 Email: ThuPhuong.Truong@vuw.ac.nz Lee Vassiliadis RH708 Phone: 4635383 Email: lee.vassiliadis@vuw.ac.nz
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Lecturer
Administrative Co-ordinator
Assessment Requirements
Assignment
Covering learning objectives 1 and 5
10% (Due at 2 pm on Friday 10 August 2012)
20%
Essay
20%
50%
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Attend at least 6 out of 8 tutorials; and Make a reasonable attempt at each of the assignment and essay.
Course Delivery
Lectures Tutorials start in week 3 and are held every week except weeks 7 and 9 Reading Material you need to keep up or you will struggle later. (About 7 hours a week on top of lectures and tutorials.)
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What is GAAP?
The financial statements of a reporting entity must comply with generally accepted accounting practice.
What is GAAP?
Section 3, Financial Reporting Act 1993, defines GAAP as follows: For the purposes of this Act, financial statements and group financial statements comply with generally accepted accounting practice only if those statements comply with
(a) Applicable financial reporting standards; and (b) In relation to matters for which no provision is made in applicable financial reporting standards and that are not subject to any applicable rule of law, accounting policies that
(i) Are appropriate to the circumstances of the reporting entity; and (ii) Have authoritative support within the accounting profession in New Zealand.
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What is GAAP?
A Professional Construct
Accounting has been created and developed to accomplish various desired objectives and, therefore, it is not based on fundamental laws or absolute precepts. (Catlett, 1960, 44)
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Quite simply, accounting is a language. when you study accounting you are essentially learning this specialised language.
www.moneyinstructor.com
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What is GAAP?
Points to note:
GAAP is ______________
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Harmonisation
Question: If accounting is a language which will develop in a jurisdictional culture, what is the impact on harmonisation of accounting? (even if we have identical standards across jurisdictions)
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Harmonisation
..recent accounting research suggests that two factors national culture and language translation could undermine the rigorous interpretation and application of IFRS and lead to a lack of comparability across countries.
IFRS:Beyond the Standards by Tsakumis, Campbell and Doupnik in Journal of Accountancy, February 2009, page 35
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International Public Sector Accounting Standards for public sector entities (IPSASs)
Initial IPSASs were based on IASs but public sector topics are now being addressed by IPSASB
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What is the relationship between the New Zealand Framework and applicable financial reporting standards?
Not a legal document In cases of conflict, the requirements of Standards prevail Standard setters should be guided by framework in establishing standards.
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Ask Yourself: What is Hines trying to say? Identify a passage or theme that you liked/disliked and note why.
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Truth Statements
Are the following statements true? How do you know that they are true or false?
a) 2 + 2 = 4 b) Telecoms profit in 2001 in New Zealand was $642 million.
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Ask Yourself: What is Hines trying to say? Identify a passage or theme that you liked/disliked and note why.
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Course Themes
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Reporting Entity
What is an entity? Which entities should be required to report? Should there be differences in accounting and reporting requirements for different entities? On what basis _______________________________ etc? If so, why?
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Relevance
influences the economic decisions of users by helping them evaluate past, present or future events or confirming, or correcting, their past evaluations (Para 26, Part B of NZ Framework).
Relevant financial information is capable of making a difference in the decisions made by users. Information may be capable of making a difference in a decision even if some users choose not to take advantage of it or are already aware of it from other sources. (AQC6, Part A of NZ Framework) 23
Relevance
Financial information is capable of making a difference in decisions if it has _________ value, ____________ value or both. (AQC7, Part A of NZ Framework)
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Reliability
NZ Framework (old, Part B): to be useful, information must also be reliable (para B31)
Information is reliable if it is free from material bias and error and can be depended upon by users to represent faithfully that which it either purports to represent or could reasonably be expected to represent (para B31)
In addition, the NZ Framework (Part B) incorporates into reliability: substance over form, neutrality, prudence and completeness.
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To be useful, financial information must not only represent relevant phenomena, but it must also faithfully represent the phenomena that it purports to represent. To be a perfectly faithful representation, a depiction would have three characteristics. It would be ________, ______and ____________. (AQC12, Part A of NZ Framework)
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Defined in Para B35 of the NZ Framework (Part B): it is necessary that [transactions and other events] are accounted for and presented in accordance with their substance and economic reality and not merely their legal form.
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Substance over form is not considered a separate component of faithful representation because it would be redundant. Faithful representation means that financial information represents the substance of an economic phenomenon rather than merely representing its legal form. Representing a legal form that differs from the economic substance of the underlying economic phenomenon could not result in a faithful representation. (BC3.26, Part A of NZ Framework)
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Harmonisation
_____________ Harmonisation ___________Harmonisation e.g. TransTasman __________ Harmonisation And how do these dimensions of harmonisation relate to our theme of the Reporting Entity?
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As we cover each topic ask yourself which of our themes is relevant to the topic and which theme(s) is/are illuminated through the topic Note when we highlight the themes
Build your knowledge of these key ideas in accounting that will give you a base from which to build future knowledge
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