13: UK GAAP Flashcards
What is GAAP? Who made it? What does it consist of?
The rules, regulations, concepts and conventions which govern accounting in the UK
Made up of:
- UK accounting standards
- Company law
The Financial Reporting Council make these. Most important is Financial Reporting Standard 102.
Who can use GAAP?
Any company who isn’t a listed company (public companies with a stock exchange listing)
Listed companies must use international accounting standards (IAS/IFRS)
What does the Companies Act require in terms of statements?
Statements must be:
- in specific formats
- show a true and fair view
Docs required in statements:
- a profit and loss account
- a balance sheet
- a directors report
- an auditor’s report
What must international companies abide by?
IASB set the IFRS and IAS.
- IAS are just older.
A listed company following international standards must also comply with the Listing Rules issues by the stock exchange they are a part of.
Companies following international standards must comply with company law
UK: Statement of Profit or Loss?
Profit and loss account, or Income Statement
UK: Revenue?
Turnover
UK: finance costs
Interest payable
UK: Statement of Financial Position
Balance Sheet
UK: Non-current assets
Fixed assets
UK: Property, Plant and Equipment
Tangible Assets
UK: Carrying amount/value
Net book value
UK: Inventory
Stock
UK: Receivables
Debtors
UK: Allowance for receivables
Provision for doubtful debts
UK: Irrecoverable debt
Bad debt
UK: cash and cash equivalents
Cash at bank/in hand
UK: Retained Earnings
Profit and Loss Account
UK: Non-current liabilities
Creditors falling due in more than 12 months
UK: loan notes
Debentures
UK: Current liabilities
Creditors calling due in less than 12 months
UK: payables
Creditors
How do the brits format their balance sheets?
Top part is net assets:
+ fixed assets
+ current assets
- current liabilities
- long-term liabilities
Bottom part is shareholders’ funds:
+ share capital
+ reserves
How the brits do a profit and loss?
Basically exactly the same!
There may be ‘interest receivable and similar income’ above finance costs.
There may also be ‘other operating income’ with expenses.
