Accounting Principles and Practicle II

Abstract

The last chapter was devoted to the accounting principles underlying the preparation of all accounts and the rules to be followed in determining the amounts to be shown in respect of stocks and work-in-progress, long-term contracts, and expenditure on research and development. It was noted that whilst companies must comply with the basic rules laid down in the Companies Act, the requirement to show a true and fair view means that companies must also follow the detailed provisions of Accounting Standards, which overlap the statutory rules. In this chapter the rules relating to several other important items are considered:

• (1) Fixed Assets: tangible and intangible;

• (2) Investments: held as current and fixed assets;

• (3) Liabilities: including capitalised government grants, contingent liabilities, leases, and pensions;

• (4) Post Balance Sheet Events.