Why and when your provider company may fail you

 


According to Investopedia, accounting standards committee (ASC) is a former organization in the United Kingdom that developed standards for financial reporting and accounting, recording these standards and communicating them through press releases and publications. It existed between 1976 and 1990 when its duties were assumed by the Accounting Standards Board (ASB). The committee was preceded by the Accounting Standards Steering Committee (ASSC).

 

Icaew.com states that “SSAPs were the previous generation of accounting standards approved and issued by the ICAEW (Institute of Chartered Accountants in England and Wales) and other accountancy bodies following recommendations from the ASC. One of the first decisions of the newly formed ASB was to adopt a number of the SSAPs issued by the ASC so that they were brought within the legal definition of accounting standards according to the Companies Act 1985. Consequently some SSAP’s are still in force today.” This means that SSAP’s are the basis of the current accounting policies but some of them needed to be changed or updated and that is the reason why FRS’s were created. Most of FRS’s are modifications of SSAP’s.

 

FRS’s (Financial Reporting Standards) are issued by the FRC (Financial Reporting Council) and SSAP's (Statements of standard accounting practice) were issued by the Accounting Standards Committee.

 

SSAP 9

SSAP 9 refers to the treatment of stock and long-term contracts.  The cost of unsold profit is considered to be recoverable until the stock is sold. On the other hand, completing and recording the long-term contracts that results in the income statements, does not reflect a fair view of the activity of a company during the period but only the results of contracts that have been completed during that time.

 

SSAP 5

SSAP 5 relates to the correct treatment of Value Added Tax (VAT) in financial statements such as balance sheet and trading and profit and loss account.

 

In the UK and Ireland, VAT is paid by the consumer but it has to be collected at each state of the production and distribution chain of any product or service. Therefore, VAT should be reflected in the accounts of a trader. However, VAT should not be included in income or in expenditure. If the VAT is not recoverable, it should be included in the cost of the items in the financial statements.

 

The standard VAT for goods and services in the UK is 20%. Most food and children’s clothes have a 0% VAT rate and home energy and some products such as children’s car seats have a 5% VAT rate.

 

In conclusion the accounting standards committee ensures that some SEO companies are protected very well from lawsuits, a various amount of firms set out to seek to ruin a business that continues to grow due to the fact that the company generates more revenue than theirs, with these standards set in place the company can focus on its promotional methods and growth so that they can continue to make more profit.

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