Audit and accounting insights - page 3

Doing the bookkeeping on your own is not always and not necessarily a good idea, and that is mainly because the accounting and tax regulations are confusing and their interpretations differ. Our long experience in saving sinking ships shows that it is simply better to leave some things to professionals. Therefore, what should you focus on when analysing the offers of accounting firms? Here is a handful of good tips.

Expectations towards accountants are growing, and it is sometimes difficult to meet these expectations due to many, often contradictory, regulations. What helps to overcome accounting intricacies is good software, but this is not a solution to everything. Therefore, what an accountant can do in order to effectively navigate through the meanders of accounting?

When keeping the accounting books, you come across many economic events you are obliged to correctly recognise in the financial statements at the end of the reporting period. Sometimes you come across unusual, less common events, such as inventory valuation or reserve recognition. Non-current assets held for sale and assets related to discontinued operations, regulated in detail in IFRS 5, are other examples here.

When looking for information on the condition of the company, users of financial statements very often focus on analysing the balance sheet and the profit and loss account. However, not everyone knows that it is the cash flow statement that contains information about the actual cash position and the direction of cash flows in an organisation.

Sometimes leasing equipment and machines abroad is less expensive than in Poland. However, the leasing of such equipment entails additional obligations, which taxpayers are very often unaware of. Firstly, under tax law, when a Polish entrepreneur purchases equipment rental or leasing services from foreign entities, the regulations on WHT (withholding tax) collection apply.

Companies are increasingly offering a wide variety of employee benefits to their employees. The question which follows is how to value such benefits, especially the long-term ones. This and other matters relating to employee benefits are addressed in IAS 19 Employee Benefits.

If not for Facebook and some extremely nice gentleman who exactly a year ago talked me into taking up ACCA accredited studies, I wouldn’t have passed 9 ACCA exams certifying my professional qualifications and giving me the feeling that I have taken a great step forward in my professional life. I’ve decided to invest in own development and I don’t regret taking up this challenge.

As I mentioned in my previous article on Asset measurement in a state of epidemic and economic slowdown, the measurement should be careful when it comes to right-of-use assets (i.e. leased assets, as they are popularly called), all the more so since an amendment to IFRS 16 has been in force for more than a month now.

When complex manufacturing processes make cost accounting insufficient as a source of information for decision making purposes, it is a good idea to opt for activity based costing (ABC). This concept is more than just calculating a unit cost; it is about monitoring the costs of processes and activities in an organisation.

In the previous article, I focused on asset measurement at fair value in the times of economic recession, uncertain future of companies and limited information exchange in the context of IFRS 13 assumptions. What about the measurement of assets to which IFRS 13 does not apply? Contrary to what you may think, there are quite a few of them.