Essentially when you\u2019re doing your accounting, you have had to opt for an accounting framework. An accounting framework is a set of guidelines based upon which you\u2019re recognizing your transactions within your \u201cbooks\u201d or set of financial statements.\u00a0<\/p>\n
Accounting framework sets out the principle guidelines, it gives you the structure; it gives examples and shows you how to treat certain areas and specific transactions. Generally speaking an accounting framework is something that\u2019s set locally and when setting up your business in this specific country, you may be required to follow the accounting policies applicable in this country (called the \u201cGAAP\u201d or generally accepted accounting principles of this country). Obviously there are universally accepted accounting guidelines as well, set out in \u201cIFRS\u201d or international financial reporting standards. Some countries allow the IFRS to be used and I would even say that some of the local policies are sometimes simplified versions of IFRS.<\/p>\n
Regardless however, it\u2019s important to understand that if you\u2019ve opted for an accounting framework for your set of financial statements and accounting, you must ensure compliance with the set out rules laid out there. Accounting does not mean that you can choose whichever accounting principle from any framework as suits you. Unless, and this may happen, the guidelines are \u201csilent\u201d or say nothing about your transaction or specifically say that the guideline is not meant for such type of transactions and gives you the reference to another source maybe you can use. If there is no other source to look help from, the general rule is that you should either consult with guidance on similar situation (if there is any) or use the same guidance as has been applied in similar practice or that\u2019s called \u201cbest practice\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"
Essentially when you\u2019re doing your accounting, you have had to opt for an accounting framework. An accounting framework is a set of guidelines based upon which you\u2019re recognizing your transactions within your \u201cbooks\u201d or set of financial statements.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[74],"tags":[],"class_list":["post-5030","post","type-post","status-publish","format-standard","hentry","category-2-7-accounting-in-itself"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5030","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=5030"}],"version-history":[{"count":1,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5030\/revisions"}],"predecessor-version":[{"id":5031,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5030\/revisions\/5031"}],"wp:attachment":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=5030"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=5030"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=5030"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}