Modification Of Cash and Accrual Based Accounting
Basis of accounting is basically the same as the cash basis, but the basis is accounting for the current year is added to the time or period (specific period) for example 1 or 2 months after the period ("leaves open the books"). Receipts and disbursements incurred during a particular period but due to the previous reporting period will be recognized as revenues and expenditures over the last reporting period (previous period). Cash flow at the beginning of the reporting period are taken into account in the reporting period last year subtracted from the reporting period running.
The financial statements in this basis also requires additional disclosures on certain items that are generally recognized on the basis of accrual accounting. Such disclosure shall be in accordance with the accounting standards. In addition to the items disclosed in the cash basis, there are several separate disclosure on near-cash balances are shown in receivables to be received and the debt that will be paid for a certain period and the financial assets and liabilities.
C. Accrual Based Accounting
Accrual-based accounting means a basis of accounting in which economic transactions and other events are recognized and recorded in the accounting records and reported in the financial reporting period at the time of the transaction, not when cash or cash equivalent is received or paid. Accrual basis of accounting is used by many public sector institutions and other institutions are for-profit. International Monetary Fund (IMF) as a creditor institutions formulate Government Finance Statistics (GFS) in which advise the debtor countries to adopt accrual-based accounting in financial reporting. The reason is because the application of the accrual basis of recording time (recording) in accordance with the time of the current resource. So the accrual basis provides a precise estimate of the effect of government policy on the economy at the macro level. Additionally accrual basis provides the most comprehensive information resource for the entire flow record, including internal transactions, in-kind transactions and other economic flows.
There are several benefits that can be obtained on the application of the accrual basis, both for the user reports (user) as well as for-profit organization as a provider of financial statements. These benefits include:
Can present its financial position and changes nonprofits
Demonstrate accountability for the use of non-profit organizations of all resources
Demonstrate accountability for the management of non-profit organizations all assets and liabilities are recognized in the financial statements
Shows how nonprofit organizations fund its activities and meet its cash needs
allows the user to evaluate the ability of nonprofit organizations in medanai activities and to fulfill its obligations and commitments
Assist users in making decisions about providing resources to, or doing business with entities
Users can evaluate the performance of nonprofit organizations in fund management, efficiency and delivery of services.
In detail, the recognition of items in the Statement of Financial Position with the application of accrual basis are:
Property and equipment, to be recognized as a fixed asset, the asset must be tangible and meet the following criteria:
Have a useful life of more than 12 (twelve) months;
The cost of an asset can be measured reliably;
Not intended for sale in the normal operation of the entity, and
Acquired or constructed with the intention to use
Obligation, an obligation which is recognized when it is probable that this expenditure of economic resources will be made or have been made to resolve existing obligations to date, and changes in the liability settlement has a value that can be measured reliably.
Modification of Accrual Based Accounting
Basis of accounting These include the recognition of some assets, but not all, such as physical assets, liabilities and the recognition of some, but not all, such as debt retirement. Examples of variation (modification) of accounting accruals, can be found in paktek as follows:
The recognition of all assets, except for assets which are recognized as an expense (expense) at the time of acquisition. This treatment was adopted because the practice is difficult and costs to identify or assess those assets.
Recognition of nearly all assets and liabilities according to the accrual basis, but the recognition of revenue based on the cash basis or modified cash basis
Recognition of assets and liabilities only for short-term financial
Recognition of all liabilities with the exception of certain obligations such as debt retirement.
Basis of accounting is basically the same as the cash basis, but the basis is accounting for the current year is added to the time or period (specific period) for example 1 or 2 months after the period ("leaves open the books"). Receipts and disbursements incurred during a particular period but due to the previous reporting period will be recognized as revenues and expenditures over the last reporting period (previous period). Cash flow at the beginning of the reporting period are taken into account in the reporting period last year subtracted from the reporting period running.
The financial statements in this basis also requires additional disclosures on certain items that are generally recognized on the basis of accrual accounting. Such disclosure shall be in accordance with the accounting standards. In addition to the items disclosed in the cash basis, there are several separate disclosure on near-cash balances are shown in receivables to be received and the debt that will be paid for a certain period and the financial assets and liabilities.
C. Accrual Based Accounting
Accrual-based accounting means a basis of accounting in which economic transactions and other events are recognized and recorded in the accounting records and reported in the financial reporting period at the time of the transaction, not when cash or cash equivalent is received or paid. Accrual basis of accounting is used by many public sector institutions and other institutions are for-profit. International Monetary Fund (IMF) as a creditor institutions formulate Government Finance Statistics (GFS) in which advise the debtor countries to adopt accrual-based accounting in financial reporting. The reason is because the application of the accrual basis of recording time (recording) in accordance with the time of the current resource. So the accrual basis provides a precise estimate of the effect of government policy on the economy at the macro level. Additionally accrual basis provides the most comprehensive information resource for the entire flow record, including internal transactions, in-kind transactions and other economic flows.
There are several benefits that can be obtained on the application of the accrual basis, both for the user reports (user) as well as for-profit organization as a provider of financial statements. These benefits include:
Can present its financial position and changes nonprofits
Demonstrate accountability for the use of non-profit organizations of all resources
Demonstrate accountability for the management of non-profit organizations all assets and liabilities are recognized in the financial statements
Shows how nonprofit organizations fund its activities and meet its cash needs
allows the user to evaluate the ability of nonprofit organizations in medanai activities and to fulfill its obligations and commitments
Assist users in making decisions about providing resources to, or doing business with entities
Users can evaluate the performance of nonprofit organizations in fund management, efficiency and delivery of services.
In detail, the recognition of items in the Statement of Financial Position with the application of accrual basis are:
Property and equipment, to be recognized as a fixed asset, the asset must be tangible and meet the following criteria:
Have a useful life of more than 12 (twelve) months;
The cost of an asset can be measured reliably;
Not intended for sale in the normal operation of the entity, and
Acquired or constructed with the intention to use
Obligation, an obligation which is recognized when it is probable that this expenditure of economic resources will be made or have been made to resolve existing obligations to date, and changes in the liability settlement has a value that can be measured reliably.
Modification of Accrual Based Accounting
Basis of accounting These include the recognition of some assets, but not all, such as physical assets, liabilities and the recognition of some, but not all, such as debt retirement. Examples of variation (modification) of accounting accruals, can be found in paktek as follows:
The recognition of all assets, except for assets which are recognized as an expense (expense) at the time of acquisition. This treatment was adopted because the practice is difficult and costs to identify or assess those assets.
Recognition of nearly all assets and liabilities according to the accrual basis, but the recognition of revenue based on the cash basis or modified cash basis
Recognition of assets and liabilities only for short-term financial
Recognition of all liabilities with the exception of certain obligations such as debt retirement.
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