Accounting Practices
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As we states earlier, the way in which financial accounts are presented, are in the basic trial balance, trading profit and loss, and balance sheet formats. 

However certain procedures need to be followed in order for the accounts to be legally acceptable in the UK. 

These accounting practices come in the form of Statement of Standard Accounting Practices (SSAP) and Financial Reporting Standards (FRS). 

Both SSAP and FRS are rules which must be incorporated in both the calculations and noted at the bottom of the financial statement data. SSAP is the older standard which is being phased out by FRS. We shall now examine some of the current standards in the table below.

TYPE NO ISSUED TITLE DESCRIPTION
SSAP 2 11/71 Disclosure

Defined simple polices which must be maintained in all accounting policies. Has been updated by FRS 18

SSAP 4 04/74 Government Grants

Details on reporting grants in financial statements.

SSAP 5 04/74 VAT

Reporting and calculation of VAT payments.

SSAP 9 05/75 Stocks

Calculation of stock values.

SSAP 12 12/77 Depreciation

Outlines basic calculation of depreciation. This has been replaced by FRS 15.

SSAP 13 12/77 Research & Development

Deals with R&D, defined as pure and applied research.

SSAP 15 10/78 Deferred Tax

Deals with Tax calculations. Superseded by FRS 19.

SSAP 17 08/80 Post Balance Sheets

Deals with disclosure of adjustments.

SSAP 19 11/81 Investment Properties

Property is to be shown on balance sheets at current market value with no depreciation.

SSAP 20 04/83 Foreign Currency

Deals with foreign currency transactions.

SSAP 21 08/84 Leases & Hire Purchase Contracts

Deals with businesses and hire purchase contracts.

SSAP 24 05/88 Pension Costs Deals with calculation and disclosure of pension data. To be superseded by FRS 17.
SSAP 25 06/90 Segmental Reporting Deals with reporting accurate data for businesses operating in several regions.
FRS 1 09/91 Cash Flow Statements

Deals with items to be included in cash flow statements.

FRS 2 06/92 Subsidiary Undertakings

Deals with data calculations between parent and subsidiary businesses.

FRS 3 10/92 Financial Performance

Requires a business to highlight important changes in business performance.

FRS 4 12/93 Capital Instruments

Deals with how capital is shown in accounts and how it is made up from, e.g shareholder equity.

FRS 5 04/94 Substance of Transactions

Deals with 'off balance sheet' financing in terms of assets which are used by a business, but does not belong to them.

FRS 6 09/94 Mergers & Acquisitions

Deals with showing transactions regarding mergers & acquisitions.

FRS 7 09/94 Fair Values in Acquisitions Accounting

Deals with showing accurate values in Acquisitions.

FRS 8 10/95 Related Party Disclosures

Deals with ensuring any data that a business presents for a related party is shown accurately.

FRS 9 11/97 Associates and Joint Ventures

Again proper disclosure of business agreements.

FRS 10 12/97 Goodwill and Intangible Assets

Deals with items which cannot be properly calculated.

FRS 11 07/98 Impairment of Goodwill & Fixed Assets

Further rules governing assets and goodwill agreements.

FRS 12 09/98 Provisions, Contingent Liabilities, and Contingent Assets Deals with assets and liabilities correctly.
FRS 13 09/98 Derivates and Other Financial Instruments  Further Rules on Disclosure.
FRS 14 10/98 Earnings Per Share

Deals with calculating the amount each share of a business has earned.

FRS 15 02/99 Tangible Assets

Sets out new procedures dealing with assets.

FRS 16 12/99 Deferred Tax

Deals with tax calculations.

FRS 17 11/00 Retirement Benefits

Deals with amended Pension scheme calculations.

FRS 18 12/00 Accounting Policies

Deals with applying new standards in accounting.

FRS 19 12/00 Deferred Tax

Deals with new  guidelines for tax calculations.

FRSSE   Companies Act 1985  

Reporting standards for companies with less than 2.8 Million turnovers.

We would recommend visiting the web-sites listed in the Accounting Links section to get more detailed information on the standard. 

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