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Introduction To NAS, IFRS and GAAP

Nepalese Accounting Standards (NAS) are accounting standards issued by the Accounting Standards Board of Nepal to standardize accounting policies and practices in Nepal. International Financial Reporting Standards (IFRS) are international standards for preparation of financial statements developed by the International Accounting Standards Board. Generally Accepted Accounting Principles (GAAP) are the standards and guidelines for financial accounting used to prepare and present financial statements. GAAP aims to ensure consistency and transparency in financial reporting.

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603 views3 pages

Introduction To NAS, IFRS and GAAP

Nepalese Accounting Standards (NAS) are accounting standards issued by the Accounting Standards Board of Nepal to standardize accounting policies and practices in Nepal. International Financial Reporting Standards (IFRS) are international standards for preparation of financial statements developed by the International Accounting Standards Board. Generally Accepted Accounting Principles (GAAP) are the standards and guidelines for financial accounting used to prepare and present financial statements. GAAP aims to ensure consistency and transparency in financial reporting.

Uploaded by

Paayal Shah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Introduction to NAS, IFRS and GAAP

Nepal accounting standard is written policy documents issued by expert accounting body or
regulatory body.it covers the aspect of recognition, measurement, presentation and disclosure
of accounting transactions in the financial statements. Nepal has issued its own NAS in 2001
A.D. to localize them properly. NASs are the standard issued by accounting standard board in
Nepal. In Nepal there are 27 issued Nepalese accounting standards. Establishment of NASs
main objective is to harmonize the diverse accounting policies and practices in order to
promote transparency in accounting.

International Financial Reporting Standards is set of accounting standards that must be


followed by the accountant. Previously known as International Accounting Standard (IAS) .
It was developed by International Accounting Standard Boards (IASB). IFRS are set of
international accounting standards stating how particular types of transactions and other
events should be reported in financial statement. The mission of IFRS foundation is to “bring
transparency, accountability and efficiency to financial market around the world”. Not only
does the IFRS foundation supply and monitor these standards, but also provides suggestions
and advice to those who deviate from the practice guidelines.

Generally accepted accounting principal is simply the universally accepted guidelines used
by the accountants more precisely to measure process and communicate the financial
information to various stakeholders. These principles are established by the International
Financial Accounting Standard Board (IFSAB). GAAP is combination of authoritative
standards set by policy boards and the commonly accepted ways of recording and reporting
accounting information. GAAP is meant to ensure a minimum level of consistency in
company’s financial statements, which makes it easier for investors to analyse and extract
useful information and also facilitate cross comparison of fincial information across different
companies.

Investment property is property ( land or a building or part of building


or both) held by owner or by the lessee under a finance lease to earn
rentals or for capital appreciation or both or rather than for:

 Use in the production or supply of goods or services for


administrative purposes
 Sale in the ordinary course of business
The way in which an investment property is used has a significant
impact on its value. Investors sometimes conduct studies to determine
the best and most profitable , use of property. For example,if an
investment property is zoned for both commercial and residential use,
the investors compares the pros and cons of both option until he
ascertains which one has the potential for the highest rate for return,
and utilizes the property in that manner
Similarities GAAP IFRS
I Measure at depreciation cost or
treat the same as for other fair value and recognize changein
(depreciation cost) fair value in income statement
GAAp IFRS
There is no specific definition of investment Investment property is separately defined as property (land
property. The historical-cost model is used for most and/or buildings) held in order to earn rentals and/or for capita
real estate companies and operating companies appreciation. The definition does not include owneroccupied
holding investment-type property. Investor property, property held for sale in the ordinary course of
entities—such as many investment companies, business, or property being constructed or developed for such
insurance companies’ separate accounts, sale. Properties under construction or development for future
banksponsored real estate trusts, and employee use as investment properties are within the scope of investmen
benefit plans that invest in real estate—carry their properties. The acquisition of an investment property may
investments at fair value. The fair value alternative either be an acquisition of an asset or a group of assets or a
for leased property does not exist. business combination within the scope of IFRS 3, Business
Combinations. Investment property is initially measured at cost
(transaction costs are included). Thereafter, it may be
accounted for on a historical-cost basis or on a fair value basis
as an accounting policy choice.2 When fair value is applied, the
gain or loss arising from a change in the fair value is recognized
in the income statement. The carrying amount is not
depreciated. The election to account for investment property a
fair value may also be applied to leased property.

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