Please enter something
Consistency In Accocunting Information Essay Example
Consistency In Accocunting Information Essay Example

Consistency In Accocunting Information Essay Example

Available Only on StudyHippo
  • Pages: 2 (823 words)
  • Published: October 31, 2018
  • Type: Essay
Text preview

The charity has kept their accounts in a consistent manner as required by accounting and financial generally accepted statements of UK and Ireland. I will begin with the definition of consistency. Consistency and comparability are also key characteristics of accounting information from the analyst perspective. Consistency refers to use of the same accounting principles over time.

A broader term, comparability, refers to comparisons among companies. Consistency is affected by new accounting standards and voluntary changes in accounting principles and estimates.Accounting changes hinder the comparison of operating results between periods when the accounting principles used to measure those results differ. As the transition provisions of new accounting standards vary, it is frequently difficult to obtain a consistent time series of earnings properly adjusted for such changes. For voluntary changes the effect of the change is generally disclosed only for the year of the change.

Comparability is a pervasive problem in financial analysis.Companies are free to choose among different accounting methods and estimates in variety of areas, making comparisons of different enterprises difficult or impossible. Although the FASB has narrowed these differences somewhat in recent years, new types of transactions create new sources of non-comparability. Even when accounting difference does not exist, however, comparability may be missing because of real differences between the firms. They have given us financial statements with accounting policies that are consistent from here to here.In their policies, they have not indicated any point where they have changed from time to time.

These accountning policies include: The accounts have been prepared un

...

der the historical cost invention as modified by the revaluation of investments and in accordance with applicable accounting standards. The accounts comply with the recommendations of the statements of recommended practice Accounting and reporting by charities (the SORP) revised in 2005. The charity fully adopted financial standard 17 retirement benefits (FRS17) from 1 April; 2005.The accounts incorporate the results of the wholly owned trading company, Dulwich Picture Gallery Enterprises limited (DPGE).

In the statement of financial activities the results of DPGE are consolidated with those of the operating fund of the gallery on a line by line basis. Separate balance sheets as at 31 March 2007 are presented for the group as a whole and for the gallery. Donations and investments income are shown in the accounts when the conditions for receipt have been met.Legacy income is shown when thee is certainty of receipt and the amount due to be ascertained with reasonable accuracy.

Cost of generating funds include investment management fees and the staff and other costs associated with fundraising as well as the costs include all expenditure on the education department, the temporary exhibition program, the collection and building and publicity. Governance costs include all expenditure on constitutional and statutory requirements and costs associated with board meetings and of staff liaising with board members on strategic issues.Support costs, which include administration staff costs and general office expenses, have been apportioned to the charities activities. Staffs in post prior to February 2002 were offered membership of a defined benefit pension scheme. Contributions to the scheme are charged in the statement of financial activities so as t

View entire sample
Join StudyHippo to see entire essay
View entire sample
Join StudyHippo to see entire essay

spread the cost of pensions over the employees’ working lives. The investments comprising the funds of the plan are administered by pensions over the employees’ working lives.

The investments comprising the funds of the plan are administered by pension fund trustees and are independent of the gallery’s assets. Further, details are set out in note 18. Other staffs are offered membership of a defined contribution scheme. Employer contributions to this scheme are charged in the statement of financial activities as incurred. Further details are set out in note 19.

The value of the collection of pictures and historic furniture held ate the gallery is not reflected in the accounts.These are heritage assets whose historic value is not readily ascertainable and the trustees consider that the cost of obtaining a valuation would outweigh the benefit to users of the accounts. The cost of additions to the collection is written off as incurred in the statement of financial activities, as such additions are infrequent and their cost is immaterial in relation to the collection as a whole. The financial policies listed above indicate that the firm maintains policies that are followed from here to here and they form the basis of financial statements preparations.

They have indicated how assets that are fixed assets are recorded from here to here. This shows consistent in liabilities of the firm. They have also indicated that their accounts are kept on the basis of accrual. Accrual basis is where accounting is done not in receipts and payments but on actual costs incurred at a specific period for a specific incoming resource, for example if 1 indicates that his money will finance activities for the following period, it will expended that specific period and for the specific purpose. It will be recorded as an income for the period it will be expended.

View entire sample
Join StudyHippo to see entire essay