Question

Accounting is a branch of applied economics and provides information about business and financial transactions to users to facilitate resources allocation decisions. What distinguishes international accounting?

Answer 1

MEANING OF ACCOUNTING-

ACCOUNTING refers to measurement, classifying, summarising and communicating the financial information to the users.

In easy language, Accounting is a process which main objective is to record the financial transactions, measuring it, classifying it into ledgers, verifying,summarising it , interpreting and communicating the financial information.

Accounting process mainly runs on the basis of Accounting rules and regulations. The main focus was to provide Financial statements, performance to the business and it's users.

There are some points which business accounting management must take care of-

1. Accuracy of FINANCIAL STATEMENT.

2. Reliability of Financial statements.

3. Should follow the basic principles for making financial statements and all the information about business.

MEANING OF INTERNATIONAL ACCOUNTING-

In the era of globalisation, technology and businesses are carried world wide. Accounting is a language of business. Therefore, there is a need of unify the accounting practice world wide for not speaking different languages while sharing Financial information .

INTERNATIONAL ACCOUNTING REFERS TO THE ACCOUNTING PROCESS WHICH RECORDS, CLASSIFY, SUMMARISING AND COMMUNICATING THE FINANCIAL STATEMENTS AND INFORMATION ON THE BASIS OF PRINCIPLE BASED ACCOUNTING STANDARDS. International Accounting runs on the IFRS(INTERNATIONAL FINANCIAL REPORTING STANDARDS).

International Accounting records all the transactions at fair value price.

THE TWO BASIC DIFFERENCE BETWEEN ACCOUNTING AND INTERNATIONAL ACCOUNTING -

1.International Accounting is principal based Accounting System while on the other side, Accounting is rule based, rules which is based on sound and clearly stated principles.

2. International Accounting based on fair value concept to record all the financial information so, it can provide fair view of accounts in financial statements. On the other hand, Accounting is based on historical cost concept to record all the financial information which give the financial statements at the historical cost.

3. International Accounting main objective is to unify the accounting language by launching IFRS but Accounting has different languages for sharing financial statements.