Financial statements produced using FIRS were used to obtain startup fund. Current quarterly statements are produced using this format to maintain consistency and clarity for investors’ sake. SUBS lists balance sheet items, revenue, liabilities, and share measurements. GIBBS follows FIRS rules when reporting their financial data in every month financial statements fairly and accurately. It is good to use FIRS in the accounting process for any business so that all financial are being reported fairly and accurately.
SUBS records assets at their cost using cost principle. International revenue from customers that belong to various countries is tracked and reported using FIRS. SUBS combines GAP along with the FIRS so that largely impacts stock markets, investors, corporate management, accounting standards and accounting professionals’ setters. Cubit’s financial statement includes GAP and FAST principals to accommodate US based customers and accountants.
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FIRS is dynamic and it helps the company produce financial statements dynamically in a constant changing environment. The convergence of both these standards helped SUBS in producing financial statements with professionalism, uniformity, optimism and transparency. The major difference between GAP and FIRS comes down to being rules- based vs… Reminisces-based; this poses a challenge in areas such as the income statement, consolidation, the earnings-per-share calculation, the inventory, and the costs. In consolidation, U.
S. GAP prefers a risks-and-reward model where as the FIRS favors a control model. U. S. GAP shows extraordinary items as net income where as FIRS segregates. U. S. GAP provides the option of LIFO, average cost or FIFO where as FIRS does not allow LIFO for inventory valuation. Under the FIRS the PEPS calculation does not average the individual interim period calculations, but the U. S. GAP does. Regarding developmental costs, GAP considers them as expenses while FIRS capitalizes them based on specific criteria.
Both FAST and FIRS have identified short- and long-term convergence projects, including 20 reporting areas where differences have been resolved and completed. 3. Pro Formal 4. Internal Controls SUBS needs internal controls to provide assurance in order to achieve forecasted financial reporting, compliance and operating objectives. These internal controls help SUBS to achieve its mission by ensuring that the policies, directions, practices and reoccurred approved and designed by management and board of directors are implemented properly and functions accordingly.
It also ensures effectiveness is sustained in an ever changing dynamic environment. All of the five control components in the COCO integrated framework, Control Activities, Control Environment, Risk Assessment, Monitoring, and Information & Communication are very important. SUBS implements all the five controls as an essential internal control and doesn’t compromise on any one of them. Of the five, the most important two implemented as critical are control activities and control environment.