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    Notes Topic 2

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    Fatin Nur Dini
    The Malaysian Accounting Standards Board (MASB) establishes accounting standards and principles for financial reporting in Malaysia. The MASB develops new standards, reviews existing standards, and contributes to international financial reporting. Key accounting principles established by the MASB include the historical cost principle, objectivity, matching principle, revenue recognition, and full disclosure. Financial statements prepared under these principles include the income statement, statement of financial position, statement of changes in equity, and statement of cash flows.

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    Notes Topic 2

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    Fatin Nur Dini
    33 views5 pages
    The Malaysian Accounting Standards Board (MASB) establishes accounting standards and principles for financial reporting in Malaysia. The MASB develops new standards, reviews existing standards, and contributes to international financial reporting. Key accounting principles established by the MASB include the historical cost principle, objectivity, matching principle, revenue recognition, and full disclosure. Financial statements prepared under these principles include the income statement, statement of financial position, statement of changes in equity, and statement of cash flows.

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    The Malaysian Accounting Standards Board (MASB) establishes accounting standards and principles for financial reporting in Malaysia. The MASB develops new standards, reviews existing standards, and contributes to international financial reporting. Key accounting principles established by the MASB include the historical cost principle, objectivity, matching principle, revenue recognition, and full disclosure. Financial statements prepared under these principles include the income statement, statement of financial position, statement of changes in equity, and statement of cash flows.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    33 views5 pages

    Notes Topic 2

    Uploaded by

    Fatin Nur Dini
    The Malaysian Accounting Standards Board (MASB) establishes accounting standards and principles for financial reporting in Malaysia. The MASB develops new standards, reviews existing standards, and contributes to international financial reporting. Key accounting principles established by the MASB include the historical cost principle, objectivity, matching principle, revenue recognition, and full disclosure. Financial statements prepared under these principles include the income statement, statement of financial position, statement of changes in equity, and statement of cash flows.

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    Generally Accepted Accounting Principles

    Malaysian Accounting Standards Board (MASB).


    Principle functions MASB
     new accounting standards
     review or adopt existing accounting standards
     contribute directly to the international development of financial reporting
     undertake public consultation in the determination of its standards and other
    technical pronouncements
     improve the quality of financial reporting in Malaysia

    Standard Framework of Guidelines for Financial Accounting standards


    - accounting standards / standard accounting practice conventions financial
    rules statements

    Accounting Principles
    Historical cost Objectivity Matching Revenue recognition Full-disclosure
    account and report accounting Expenses have to be Accrual basis all material
    based on acquisition information needs matched with accounting information has to
    (purchase) costs to be independent revenues revenues are be disclosed in the
    rather than fair and free from reported on the financial statements/
    market value for bias. Expenses=Revenue income statement notes to financial
    most assets and s when they are statements
    liabilities. Information needs earned.
    to be based on Expenses:
    evidence and not the work or the Recording
    opinions. product actually revenues when
    makes its earned and
    contribution to expenses as
    revenue. incurred
    (dibelanjakan)

    When the revenues


    are earned but cash
    is not received, the
    asset accounts
    receivable will be
    recorded

    The flow of cash


    does not have any
    bearing on the
    recognition of
    revenue
    Cost concept
    Record cost/purchase
    price

    Objectivity concept
    -amount recorded is
    based on objective
    evidence

    -brg yang dah dibeli


    baru dikatakan
    objective evidence

    Accounting Assumptions
    Economic entity Going concern Time period Monetary-unit
    Business and owner a business that firm's operating
    treated separately functions without cycle is divided into
    the threat of separate accounting
    Record business liquidation periods
    transactions (monthly/quarterly/
    separately from annually)
    owner personal
    transactions

    Accounting Constraints
    Accounting
    Constraints
    1. Conservatism
    when two different
    acceptable methods
    could be used,
    choose the one that
    won’t overstate
    assets or profits

    2. Materiality
    report only those that
    are considered
    significant

    Financial Statements
    Financial statements
    - Profitability
    - equity or ownership
    - financial position or status
    - cash operations

     intended for users of financial information.


     have 4 statements
    Profit or Loss Owner’s Equity Financial Position Cash Flows
    reports the revenues reports the changes Include: summary of the cash
    and expenses in the owner’s - assets receipts and cash
    (matching concepts) equity - liabilities payments
    - owner equity
    net income / net loss prepared after the Have three sections:
    statement of profit or account form 1.Operating
    loss -assets left activities
    w -liabilities, owner reports a summary
    h equity right of cash receipts and
    y cash payments from
    operations.
    net income or net
    loss must be 2. Investing
    reported in this activities
    statement. reports the cash
    transactions for the
    acquisition and sale
    of relatively
    permanent assets.

    3. Financing
    activities
    reports the cash
    transactions related
    to cash investments
    by the owner,
    borrowings, and
    withdrawals by the
    owner.

    Specific period time Specific period time Specific date Specific period time

     Financial Statement Interrelationships


    Accounting Equation
    Assets = Liabilities + Owner’s Equity
    Owned = Owed

    Business Transactions
    - economic event or condition that directly changes an entity’s financial condition or its
    results of operations.
    - Revenue
    i. fees earned – services
    ii. sales - sale of merchandise
    iii. rent revenue – rent
    iv. interest revenue – interest
    - Earning revenue = expenses
    - Account receivable (asset) = claim from customer

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