Does the standard make sense?

Article Abstract:

The Accounting Standards Board (ASB) released Financial Reporting Standard (FRS) 12 in Sep 1998. Entitled 'Provisions, Contingent Liabilities and Contingent Assets,' FRS 12 comes into effect for accounting periods ending on or after Mar 23, 1999. While the new ASB document is relatively clear, much confusion exists over the accuracy of the self-insurance example cited in FRS 12. Several notable audit experts, all audit partners of major accounting firms, have concluded that the example cited is incorrect. In their view, the correct conclusion to the example in FRS 12 should be that recognition be given to the best estimate of the cost of claims forwarded by customers involved in minor accidents. Examples illustrating the argument of the audit experts regarding self-insurance provisions are provided.

Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Accounting Services Regulation, Accounting and auditing, Accounting services, Accounting law, Self-insurance, Self insurance

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FRED 1 - reporting financial performance

Article Abstract:

The Accounting Standards Board's discussion draft on financial reporting, issued in Apr 1991, has been followed up the Financial Reporting Exposure Draft 1 (FRED 1), which elaborates on the ideas specified in the discussion draft. FRED 1 proposes that that the profit-and-loss account contain an analysis of the impact of existing operations on operating profit levels. FRED 1 also specifies that the profit-and-loss account should contain at least an analysis of operating profit, exceptional items and turnover. FRED 1 does not amend existing rules until it becomes a new accounting standard.

Accounting, auditing, & bookkeeping

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