What is an accounting practice?

Accounting practice is a special set of principles for how accounts are together. In many countries, public companies are required legally required accounting practice. This is designed to facilitate the comparison of balance sheets and accounts of various companies. In fact, there are many potential variations, because assets tend to be complex. In particular, accountants must often carry out the prerequisites or estimates of the asset value holding the company. These are determined by an accounting practice, which should usually follow any publicly traded companies. Similar rules apply in most main market economies. Many such rules are based on the standard of international financial reporting, a set of instructions for accounting practice created by the International Committee.

GAAP determines the four main principles that the accounts should follow. First, the assets should be listed at the price that has been paid for them than to estimate itich the present value. Secondly, the accounts should be given as much details as possible without excessive preparation costs. Third, wherever possible, each item of expenditure should be described in detail with the specific incomes that helped produce. Finally, the income should be listed when they earn, for example, when they sell good, rather after cash is actually received.

in 90 and 2000. Years have evolved to allow greater use of the market for the Market-to-Market, also known as the accounting of real value. This includes a list of some assets based on their current value, unlike the Purchase Price Principle. The main advantage is that we do GIVES a better picture of the actual value of the asset. The main disadvantage is that it may seem that the company has achieved a large profit or loss that does not really exist until the company either decides to sell the asset or is forced to do so.

GAAP has been revised since then to impose stricter rules for useITI accounting on the market. The aim was to standardize the process that calculated the current market price. This happened because some company used doubtful prerequisites that overvalued the value of assets, which led to financial scandals. Enron was one of the commonly associated companies with this type of behavior.