K{IIEfcis I Doubte Enrry System .

@ + double'entry book-keeping system is a ser of rures for recording financiar

infbrmation in a financial aciounting system ln *ni"n t.un*"iion
two diflerent nonrinal ledger accounrs. "u".y "i"r""i"L"!". "i r""rt
The nume del'lves lrom the fact lhat financial iniormation used tr be recorded usins
oen and
link in paper book - hence "bookkeeping" (rvhereas now it is recorded *ri"iv i, 8J.prt..
systems) and that these books were cailedlournals and ledgers (hence nominal r,iag".
lhirt each transaction was entered twice (hencc "double enr?y,',y wittr one ,i.1. oi iti.'ir*rr.rion
"rc.i-"ra
It was first codified in the.l5th century by Luca paciolr. IN deciding u,hich account has to
be debited and which account has to be credit6d. the golden rules of act:o"unlrng ur. u."d. ii,i, i,
using the accounting equation: E{utty = Assets _ Liabilitiei. The accounting
1l::.f^1"y1]rh:d
equatlon serves as an emor deteclion tool. If at any point the sum of debits for all accounts doei
not equrl the con'esponding sum of credits for all^accounts, an enbr has occurred. It follows
lh t the sum ol debits and rhe sum of rhecredilsmusl be equal in value.
bookkeeping is nol a guirranrce rhar no error.s have been rnade _ for example.
tne .P-lt]::.,1",
."^ redger accounr may have been debited or credited, or the entnes completely reversdd.
:vrglg
,_1,!1.- double-entr) xccounting system, each accounting entry reco'ds related pairs
.,, _
llnancral fransactrons lor asset, liability, income. expense, or capital accounts. Recordlne of a
of
debit amount to one account and an equal credit amount to anothei account reiulrs in ioi"i
[.uit,
being equal.to total credits for all aciounts_in the general ledger. If the o.*untlng Lntii.r u..
recorded without error, the aggregate balance df all accoints having negaiiv'e uulrn."r.
Accounting entries that debit and ciedit related accounts typically lnctu"ae th? vrm"-ari" una
identifying code in both accounts, so that in case of error, Licn aeuit and credit can be tiaced
back to ajournal and transaction source document, thus preserving an audir trait. ihe *i", ro1.
formulating accounting entries are known as "Golden dules of A'ccounting;. ilr" u""ountirg
entries are recorded in the "Books of Accounts". Regardless of which accoints and ho* muny
= r-iop *ilr rrorri,
are impacted by q elv9n rransacrion, the fundamentaliccounring equation n
i.e. assets equals.liabilities plus owner's equity.

nE 36 Bank Reconciliation Statemen t tJurte-20171

. @ A Bank reconciliation is a process that explains that explains the difference between
the bank balance shown in an.organization's bank starcment, as supphed by th; ba;k, ;d the
corresponding amount shown in the organization's own accounting i'6cords it a particuiar point
in time.
s::h differences may,occur, for example., because a cheque or a list ol cheques issued by
.,
the organization has not been presented to the bank, a banking transaction, such as a credit
received, or either the bank or the organisation itself has made an ernrr.
It may be easy to reconcile the diffelence by looking at very recent transactions in either the
,
bunk slatemenr or the organisation's own accorrn ting iecordj 1c ush brrok) and seeing if some
combination of them tallies with the dil'ference to be eiplained. Othelwise ir mav be neiessary to
go through and match every single transaction in both sits of records since ths la';t ,i.oniifirr i"r,
and see what transactions remain unmatched. The necessary adjustments should then be made in
the cash book, or any timing differences recorded to assist with friture reconciliation's.
For this reason, and to minimize the amount of work involved, it is good practice to cary
out such reconciliation's at reasonably- frequent intervals. Reconciliitionis are generally
performed^ by specialize accounting seftwarb though the undersl.anding of what "occurs is
important for a successful reconciliatircn.
 5?-l Goodwill
f{Itn!tGoodwitt tluty.2lt8l
@- is an accounring concepr
intungible but hes a quantriiabre "prude"nt varu6"
meaning the value of an asset #; r;;1,
in , b;;fu;; ror.*rrpi" o ."pr"ir", ir,'"'iir,n
enjoyed with irs cljents.
while a business can invest to increase its reputation, by advertising or assunns that
its
gl"^11:l',i*:l h,igh quality. such expenses canriot be b;;[.;;;;;;i;ihr,irei"'r?"dr"irr.
r nere rs nence a.drsconnert: goodwill from acqursitions
can be booked, since it ii diriuedl,rom
a marKet or purchase valuJtion. but similar inlernal spending
cannot be booked, althoush it will
be recognized by investors who compare a company'd mark#;;i;;il;;r";;;k;;i;t' "'
There is a distinction berween two tv^pes oi goodwi depending ;p.;
th" typ;;; business
insritutronal gt,odwiil and pro6ssionaT practice gdodwiltl pirtneryo'ri, ;iil
:nleTnsq:
a prolesslonal practlce erltity may be attributed to the practice
e;od in
itself and to the p'rofessional
practttloner.
It should also be noted that whire goodwin is technicalry an intangible asset, goodwill
inungible assers are usualy risted os sjparut" items on a.onipunyt baiince :-" and
v1':vt9usly' comparies could structure many acquisilion tianshctions
streei.'---
L-. to determine the choice
merhods to record a business combination: purchase accounting or
:::Y:.-" -,.y9-l*ountrng
poollng-of-lnterests accounting. Pooling-of-interests method combined ihe book value oi ussets
aM liabilities o[ the two comp-anies to c'reate ttre new uaian"e sheet o[ the combined
comoanies.
rt tnerelore drd not distinEuish between who is buying whom. It also did
not record the o,lce ttre
acqulrlng company had to puy,,[or the acquisirion. U.S. Gene_rally
Accepred Aciountrng
principles (FAS 141) no Ionger illows pooling-of_interests method.

EEpIG]E] Imprest system of cash Book -

;ysrem is a form of financial accounting system. The most common
,*_F-Jn..l.prest
lmpresr system rs rhe pelry.cash system. The base characrerisric 6f
in imprest system
rrxeo amount rs reserred. which will be replenisged ar the end oi u p.iiod ii ihar a
circumstances re_quire. This replenishment is not cretited on the
o, *h"n
imprest aJcouri uut ]ro.
another source. when a sufficient amount is used, the urnp."rt oaaount
wilr never be credited
again. As such, it can be seen as permanent debt.
ln an, imprest system the amounr. requested is documented. the documcntation being
the
petty cash dockels and tr.eir associaled receipts or invoices. s" rt
.rr t.., v";;;;;#;ki"*
much should be lefr in tne perry cash floar by deducring rhe amounr rp"ni
petty cash float.
iro, the ofening
that you musr documenr how rhe perty cash is spent. In a perry
^^"J|.:^l:t*:,-sJsrem,cnsures
casn system. perty_ casi receipts are written for each amount issuei. so, whLn
all of fhese
receipts are totalled at the end of the month ahd deducted from the opening petiy
.orn noui, tr.,"
calculated value.must agree rvith what is left in.rhe pety cash float. Unde?
ih;
only that which is recorcied as,spent is replenished. Any shortfalls may ha* i"
i*;;;;;y;"-,
uJ,.ipr.'"iJir"a
by the guardian, usually a boolreeper, ofthe petty cash fioat irom tr,,"i.6*, p"r*rur'r.loui".r.

FrtrEfc.5-_l Deferred Revenue Expenditure INov.-2011]

while reven ue.expenditure is a simpre concept, deferred revenue expendirure is
^liffl
,
ggrplicated. In this case.. the value_ received frbm the expenditure is no't immediate.
3]91!l
Buying T:.,q
a training'progrr,m may add skills to office laboiiorces orer
iust a few days, but not all
*y, *
:Jl.,:ll gurckry. Sometimes rhe benefit is delayed over monthior even years. in this case,
Ine Duslness creates a delcrred revenue expenditure account to match up the expense
with the value
received, similar to depreciation accounts but for a different spi ofactivities.
378 *< Short Notes
Examples : A common example for deferred revenue expenditures is in marketing.
Advertising, according to many theories, has a delayed eft'ect. This meiins that the business can
spend monel'on an advertising campaign, but not rcalize increased sales until several months
dbwn the ,ine when customers absorb the full impact of the ads. Some theories disagree that
adverlising is so delayed, but if the busincss accounts for it then it will create a deferred revenue
expenditure account in order to match up the delayed value with the amortized costs of the
advertising.

G.40 International Accounting Standard Board (IASB)

llllEl tne International Accounting Standards Boerd (IASB) is the indepenclent,
accounting standard-setting body of the IFRS Foundation.
The IASB was founded on April I, 2001 as the successor to the International Accounting
Standards Committee 0ASC). It is responsible for developing Intemational Financial Reporting
Stanclards (the new name for International Accounting Standards isstred after 2001), and
promoting the use and application of these standards.
' On Jinuary 25,2001, the International Accounting Stendards Foundation (IASf),was
incorporated ai a tax-exempt organization in the US state cf Delilware. On February 6. 2001,
the International Financial Repoting Standards Foundation was also incorporated as a tax-
exempt organization in Delaware. The IFRS Foundation is the parent entity of the international
Accounting Standards Board (IASB), an independent accounting st.rndard-setter based in
London, Engllnd
On I March 2001, the IASB assumed accounting standard-setting responsibilities from its
predecessor body, the International Accounting Standards Comrnittee (IASC). This was the
iulmination of a restructuring based on the recommendations of the report Recommendations
on Shaping IASC for the Future.
The IASB structure has the following main features: the IFRS Foundation is an
independent organization having two main bodies, the Trdstees and the IASB, as well zrs a IFRS
Advisory Couicil and the IFRS Interpretations Committee (formerly the IFRIC). The IASC
Foundation Trustees appoint the IASB members, exercise oversight and ralse the fun{s needed,
but the IASB has responsibility for setting International Financial Reporting Standards
(rntemational accounting standards).
The IASB has 14 Board members (12 are full time members and 2 arc part time) each with
one vote. They are selected as a group of experts with a mix of experienue of standard-setting,
preparing and using accounts, and academic work. At their January 2009 meeting the trustees of
ihe-foundation concluded the first part of the second constituti()n review, announcing the
creation of a monitoring board and the expansion of the IASB to lti members and giving more
consideration to the geographical composition of the IASB:
The IFRS interpietations committee has 14 members. Its brief isr to provide timely guidance
on issues that arise in practice.
A unanimous vote is not necessary in order for the publication of a standard, exposure draft,
or final "IFRIC" Interpretation. The Board's 2008 due Process manual stated that approval by
nine of the members is rcquired.
The members (as ofJuly 20ll) are:
r) Hans Hoogervorst (Chairman), Netherlands, former Minister of l:lealth, Minister of
Finance.
- lan Mackintosh (Vice-chairman), New Zealand, former Coopers & Lybrand, Chief
Account AustraLan Secunties and Investments Commission
+ Stephen Cooper, UK, IIBS Investment Research