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Accountancy by Roger Bryant M.Sc, B.Sc (Econ), FCA, FIB (auth.)

By Roger Bryant M.Sc, B.Sc (Econ), FCA, FIB (auth.)

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I In 1980 the ASC commissioned a report by Professor R. A. "4 The Companies Act referred to five principles, whilst SSAP 1 had cited four, but all of those used by the latter also appear in the Act. In describing them below reference will be made to the name used in the standard, the requirements of the Act, and the explanation given in SSAP 1, where appropriate. " This means that it is assumed that the enterprise will continue in operational existence for the foreseeable future, and in particular that the accounts assume no intention or necessity to liquidate or curtail significantly the scale of operation.

In such cases the company will also need to value the stock on one ofthe acceptable bases proposed by the Act to enable them to show particulars oif their departure from the Act, the reasons for it, and its effect. RESEARCH AND DEVELOPMENT EXPENDITURE The main reason for including a discussion of the treatment of research and development expenditure in this chapter, is that like stocks and work-inprogress the topic highlights the application of the acccurals concept and illustrates its frequent conflict with the concept of prudence.

J. R. Edwards and H. J. Mellett, Accountancy for Banking Students (The Institute of Bankers, 1983). D. A. Egginton, Accounting for the Banker (Longmans, 1977). J. H. Clemens and L. S. , 1977). T. , 1982). B. Carsberg, and A. ), Current Issues in Accounting (P. , 1984). J. Samuels, C. Rickwood and A. Piper, Advanced Financial Accounting (McGraw-Hill, 1981). Chapter 2 Accounting Principles and Practice I INTRODUCTION Few of the items appearing in the accounting records of a business can appear in the financial statements as they stand.

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