Regulatory framework

This topic has 4 replies, 2 voices, and was last updated 6 years ago by MikeLittle.

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August 30, 2016 at 11:51 am #336224
aamir2111
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Hi Mike,

As per lec note, pg 3:

A conceptual framework

• framework has been developed
defined as “a constitution, a coherent system of interrelated objectives and fundamentals which can lead to consistent standards
and which prescribe the nature, function and limits of financial accounting and financial statements”

• generally accepted accounting practice ( gaap )

• a combination of:
• each country’s own law
• international financial reporting standards
• stock exchange requirements

Does this mean GAAP is an example of a regulatory framework?
August 30, 2016 at 5:02 pm #336330
MikeLittle
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No, it means that GAAP is developed and developing using the Framework as a structure within which to work

There’s a good article that explains the role of the Framework here:

https://www.accaglobal.com/content/dam/acca/global/pdf/sa_mar11_f7p2.pdf
August 30, 2016 at 7:43 pm #336372
aamir2111
- Topics: 123
- Replies: 85
Thanks Mike.

I will appreciate if you help me with small query on valuation of inventory:

Inventory is valued at lower of Cost & NRV.
Cost includes purchase cost, conversion and others.

Purchase cost includes purchase price but excludes trade discount. Does it exclude cash discount as well?
August 30, 2016 at 7:59 pm #336376
aamir2111
- Topics: 123
- Replies: 85
sorry I just read the point on discount in the notes.

Thanks 🙂
August 30, 2016 at 8:35 pm #336381
MikeLittle
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- Topics: 26
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OK, but when you start a new topic, please start a new thread!

Someone not interested in regulatory framework may be interested in inventory values but will miss it because of the misleading title
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