Guideline Of Accounting Standard Standards In Accounting Practices

1.0 Introduction

1.1 Accounting Standard

Accounting standard is a principle that helps to guide and standardize accounting practices. It refers to written policy documents that issued by expert accounting body, government or other regulatory body covering the aspects of recognition, measurement, presentation, and disclosure of accounting transactions in the financial statements. For example, Generally Accepted Accounting Principles (GAAP) is a group of accounting standards that widely accepted as appropriate to the field of accounting necessary to make sure that the financial statements are meaningful across a wide variety of businesses or industries. Accounting standard can be a guideline for financial accounting on how the management of a firm prepares and presents their business income, expenses, assets and liabilities in accordance to proper accounting standards such as International Accounting

In short, accounting standard policy refers to a decision that made in advance about how, when and whether to record or recognise economic phenomena. Normally, accounting standard policy choices can be divided into three categories which are mandatory accounting policies, alternative accounting policies, and no accounting policies. For mandatory accounting policies, the firm must apply the policy proposed for some transactions, events, and conditions. For alternative accounting policies, the firm can choose one from the alternative that proposed and apply it consistently. For example, the firm can choose either single-statement approach or two-statement approach to present their comprehensive income. While for no accounting policies, the firm need to use judgement to develop an appropriate accounting