On the application of accounting policies _4314

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On the application of accounting policies
 
 
Chinese papers League finishing. Refers to the accounting policies are followed for accounting principles and enterprise specific specific accounting treatment adopted. Refers to enterprises in accordance with specific principles, The accounting treatment of choice in the choice of appropriate accounting treatment of the unit. (1) This reflects the application of accounting policies at different levels of time. For example, the enterprise is based on an invoice issued ﹑ bill of goods as revenue recognition criteria, or to ownership of the goods transferred significant risks and rewards to the buyer and other conditions as the Revenue is recognized to belong to the specific principles of revenue recognition; and Law, the percentage of completion of the completed contract method, etc. belong to the specific accounting treatment. Enterprises can choose according to their own situation. Since this, give companies the use of accounting policy choice on a big space. For example: companies in order to speed up the renovation of fixed assets and to promote technological progress, accelerated depreciation method depreciation method can be used, so you can continue to enhance the stamina, and make enterprises in the fierce competition in the market in a good position; continued to rise in the price circumstances, the enterprises in order to better reflect the real value of inventory and profit and loss situation, can be used for inventory valuation LIFO; business investment in order to understand the real situation, provision for diminution in value of the investment or impairment; enterprises in order to accurately understand Net accounts receivable, accounts receivable of enterprises can be provision for bad debts and so on. At the same time, in the process of applying accounting policies will also have a corresponding negative effect. In this paper, the process of applying the accounting policies outlined his point defects views.   First, select a different accounting policies to reduce the comparability of accounting information - that can not meet the requirements of the principle of comparability.   Principle of comparability is the accounting of enterprises should be in accordance with the provisions of the accounting methods, accounting data shall be comparable and convenient. (2) require all enterprises in accounting should be the national unified accounting methods, so as to enable the establishment of accounting information between enterprises on the basis of mutual comparable, so that the enterprises to provide information and accounting data can be comparable. Enterprises may be in different industries, different regions, economic and business that may occur in different locations, in order to ensure the accounting information to meet the needs of economic decision-making, easy to compare the financial position and results of operations, as long as the same economic business, enterprises should using the same accounting methods and procedures. But the diversity of accounting policies, the same economic and business have many of the accounting treatment, since this will inevitably lead to the accounting between enterprises reduce the comparability of information. For example, two identical size, business scope of the same A, B and enterprises in the actual cost of inventories using the case of valuation in the stock issued when a company uses a FIFO hair, business inventory valuation B the use of LIFO. So in the case of relatively stable prices, FIFO and LIFO inventory value on the business end of the period and current profits will be much affected. However, prices continued to rise in the case of a company using FIFO method will overestimate the current enterprise value of inventory profits and ending stocks. And B enterprises are not the case, because under the LIFO method, the price continued to rise when the value of inventories close to the current market value, which would enable enterprises to reduce the inventory value of ending stocks, but to enable enterprises to increase the current cost profits decrease. This way, A and B companies even if the income and other expenses in the current circumstances are equal, also due to the different inventory valuation methods result in different cost of goods sold, the final cost of goods sold due to different gains and losses are calculated for different , so that A, B two profit targets enterprise computing lack of comparability of accounting information can not meet the requirements of the principle of comparability.   Second, the use of different accounting policies would lead to companies not to follow the requirements of the principle of consistency, leading to a certain extent, the reduction of state tax revenue.   Principle of consistency refers to the corporate accounting method shall be consistent before and after the period shall not be changed. If necessary, change the content should be changed and the reasons, the cumulative effect of change, and the cumulative effect can not reasonably determine the reasons and so on, be stated in the accounting statements. (3) To ensure the comparability of accounting information, so that users of financial reports to compare corporate financial statements more than one time period, to correctly determine the financial position, operating results and cash flow trends, under normal circumstances, the enterprise should each using the same accounting policies, should not and can not arbitrarily change in accounting policy. The only way to improve the use value of accounting information to accounting information on the period before and after comparison, analysis and use in order to prevent the accounting of the main constraints and continued through the accounting procedures and accounting treatment changes on the accounting fraud, corporate whitewash accounting statements. According to China relevant accounting information,You are not allowed to view links. Register or Login, enterprises are not allowed to change in accounting policy. The aim is to prevent the companies continue to change in accounting policy by artificial manipulation of profits, leading to corporate accounting data can not be comparable before and after the period, accounting information can not meet all the needs of the face. However, if the enterprise for its own needs, without regard for the requirements of accounting policies, and constantly change in accounting policy, it will make the accounting data before and after the period of inconsistency, resulting in the reduction of accounting information.   For example, a company in the previous fiscal year, the calculation of depreciation of fixed assets using the straight line method, then the period of fixed assets in use are equal to the amount of annual depreciation, depreciation expense as a business in general mostly fixed costs. If the business in operation during a period of straight-line method to the double declining balance method, then the whole operation period although the total amount of depreciation is the same view, but if the company some years in the business losses incurred during the case, even The same accounting information and also because of different depreciation methods used in making the calculation of depreciation expense results to differ. Under the double declining balance method in computing depreciation will increase the cost of the early years of business, resulting in increased costs, so that since the income of certain businesses, and other expenses in certain circumstances, also because included in the cost depreciation costs to calculate the different costs of different gain or loss, which may cause the loss-making enterprises into profit-making enterprises, and allowing companies to pay less or even do not pay income tax, the final result to some extent, the state's tax reduction.