Clearing the murky waters of 'big bath' accounting: FRED 14 sets out to clarify best accounting practice on provisions and contingencies
Article Abstract:
The Accounting Standards Board's new exposure draft, FRED 14 'Provisions and Contingencies,' seeks to provide guidance on the recognition, measurement and disclosure of provisions and contingencies. The draft contains elements of the Nov 1995 'Provisions' discussion paper, as well as a proposal for the revision of SSAP 18, 'Accounting for Contingencies.' Several general principles are introduced in FRED 14, including the recognition of a provision only when an entity is legally or constructively obligated to transfer economic benefits due to past events. It recommends that the recognized provision amount should be based on a realistic estimate of the cost of settling the obligation reflected on the balance sheet date. In addition, FRED 14 requires greater specificity regarding each material class of provision.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1997
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Year 2000 issues: accounting and disclosures
Article Abstract:
The Accounting Standards Board's Urgent Issues Task Force (UITF) has considered the issue of accounting for external and internal costs of modifying computers systems and programs to avoid the Year 2000 data change problem. This problem stems from the two-digit format used by many computer systems in storing data on the year of transactions. These systems are programmed such that they will store the year 2000 simply as '00,' thus resulting in processing inaccuracies and even systems failure. One of the accounting issues that the Millenium Bug raises is whether the costs for modifying computer programs to make them Year 2000 compliant should be charged as an expense or capitalized as an asset. The UITF has concluded that such costs should generally be written off to the profit and loss account.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1998
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Foreward to accounting standards
Article Abstract:
The Accounting Standards Board's (ASB) exposure draft (ED) on the scope, authority and application of the ASB's accounting standards is presented. The ED also covers such issues as: the compliance with accounting standards, the issuance of a Financial Reporting Standard, the prescription of public-sector accounting requirements, and the implications of all standards issued with respect to International Accounting Standards.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1991
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