Accounting treatment required to record a change in accounting policy.

An entity shall change an accounting policy only if change:

is required by standard or an interpretation; or if it

result into financial statements providing reliable and relevant information about the effects of transactions, other events or conditions on the entity’s financial position, financial performance or cash flows.

An entity shall account for change in … Read the rest

6 limitations of using accounting ratios in appraising financial performance.

Accounting ratio are used to measure the efficiency and profitability of the company based on its financial reports. They provide a way of expressing relationship between one accounting data point to another, and are the basis of ratio analysis.

The following are limitation of accounting ratios in appraising financial performance:

  • Inconsistent definition of ratios
  • Financial
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