Current Development In Accounting Assesment

Running head: CURRENT DEVELOPMENT IN ACCOUNTING
CURRENT DEVELOPMENT IN ACCOUNTING
Name of the Student
Name of the University
Author Note

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CURRENT DEVELOPMENT IN ACCOUNTING
Table of Contents
Answer to Question 1:................................................................................................................2
Answer to Question 2:................................................................................................................4
Answer to Question 3:................................................................................................................6
References..................................................................................................................................9

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CURRENT DEVELOPMENT IN ACCOUNTING
Answer to Question 1:
In the AASB conceptual framework, there are several terms which are used in
defining the financial information that is being provided for the “faithful representation”. In
the framework there is another term which is been used i.e. “neutrality”, which enhances that
the information that is been provided are neutral and not biased. This term is used so that it
gives the reader a clear presentation that the information that is in the financial statements
does provide true and fair view. In providing a faithful representation, it does help in
representing the reporting of the financial statements of an organization. With the help of this
keyword i.e. “faithful representation”, it also determines that the statements are reliable. All
the numbers and words that are represented in the financial statements are relevant and it
does provide the information in a legal way, that helps in differentiating from the economic
substance which does resulted in a faithful representation(Abdel, 2018). There are also three
characteristics that will help in the perfectly define the faithful representation, those are
complete, neutral and free from error. It does means that all the data that are stated in the
financial report, are free form the error and the reported information are all processed. The
statements are clear and accurate and there are no limitations in making the statements and in
developing the estimate. With the help of faithful representation, it does have e relevant
phenomenon and does help the users in making good decisions and the report has been made
with an effective process, thus it could be represented faithfully. There are several
characteristics that does help in defining the term which are comparability, verifiability,
timeliness and understandability, it helps in explaining that it is equally relevant and are
represented faithfully.It does have a faithful representation upon the economic activities of
the reporting entity, that has been stated within the reporting entity(Ngwenya, 2019). All the
items that are been stated are assets, liability, income and expenses that has been the

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CURRENT DEVELOPMENT IN ACCOUNTING
substance of transaction upon which it has been risen. There is faithful representation which
are related to the rights and regulations and obligations which are able to necessary in
recognizing and can measure it separately. There is a complete depiction that helps all the
information that is been necessary for the user of financial statements in understanding the
phenomenon that has been depicted which does include all the descriptions that are necessary
and explanations(Mangala&Dhanda, 2018). All the disclosures that are related can be
enabled in recognizing the amount through which there has been a faithful representation
upon the assets, liability, income or certain expenses and an equity claim. As per the IASB, a
perfectly faithful representation means that the financial statement has been free from error,
which it also means that it is perfectly accurate upon all the respects.
The neutrality is one of the component of the faithful representation, it does means
that the data that are in the financial reporting are without biased. To achieve the neutrality,
there should be reintroduction of explicit reference upon the notion of prudence and in stating
that the prudence is also essential so that it can be achieved. It helps in the exercise of
prudence, that helps in making the judgements upon the condition of uncertainty. It does not
allow the understatement of the assets and income that are not been overstated, and the
liabilities and expenses are also not understood(Gornik& Choi, 2018). The information that is
been contained in the financial reporting that are considered neutral and are free from bias.
There are two aspects of neutrality, which are selection of neutral accounting policies, neutral
application of accounting policies, it does help in providing the relevant information and
representing the items. It does help in selecting the accounting policies that are presented in
neutral manner. As per the IASB, there are several judgments that are considered upon
applying the accounting policies that are considered as the prudence. With the help of
neutrality, it does help the financial statement in reflecting the balance view upon the affairs
of the organization.