BTEC National Business
Assignment No. 5 Business Accounting
Task 1.1

Task 1.2.
International accounting standards are a set of rules and/or practices in recording and registering business transactions in company’s ledgers and accounts, keeping books and preparing reports on the financial and other business results and standing to owners, public and authorities. Certainly all standards are based on a golden rule of accounting – double entry.
Accounting standards are necessary so that financial statements are meaningful across a wide variety of businesses.
In the past the authorities of each country endorsed their own rules and instructions on how the financial reports should be made up but in the second half of the XX-th century international business and governments recognized that the international capital markets require both transparency and unification, otherwise, the accounting rules of different companies would make comparative analysis almost impossible and the economic development and growth could be hindered when international investors were deprived of the possibility to compare cost-effectively their investments options across the trading board.
Initial efforts focused on harmonization—reducing differences among the accounting principles used in major capital markets around the world. By the 1990s, the notion of harmonization was replaced by the concept of convergence—the development of a unified set of high-quality, international accounting standards that would be used in at least all major capital markets.
The International Accounting Standards Committee, formed in 1973, was the first international standards-setting body. It was reorganized in 2001 and became an independent international standard setter, the International Accounting Standards Board (IASB). As of 2013, the European Union and more than 100 other countries either require or permit