Recognising the continuing importance of accounting concepts for tax professionals Stuart Collins Partner PKF considers the treatment of provisions and contingent liabilities
Financial Reporting Standard 12 'Provisions contingent liabilities and contingent assets' (FRS 12) has now been around for five years. Before it was introduced there was no specific guidance on how to recognise provisions in financial accounts. Provisions can arise in a wide range of circumstances and are often substantial. The lack of clarity in this area allowed abuse through 'creative accounting' and was reducing the comparability of company accounts.
The Need For Accounting Rules
A practice grew up of aggregating current and future liabilities and even ongoing operating expenses into so-called 'big...
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Recognising the continuing importance of accounting concepts for tax professionals Stuart Collins Partner PKF considers the treatment of provisions and contingent liabilities
Financial Reporting Standard 12 'Provisions contingent liabilities and contingent assets' (FRS 12) has now been around for five years. Before it was introduced there was no specific guidance on how to recognise provisions in financial accounts. Provisions can arise in a wide range of circumstances and are often substantial. The lack of clarity in this area allowed abuse through 'creative accounting' and was reducing the comparability of company accounts.
The Need For Accounting Rules
A practice grew up of aggregating current and future liabilities and even ongoing operating expenses into so-called 'big...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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