Accounting Standards
Definition
The authoritative rules governing how transactions are recognised, measured and disclosed in financial statements, such as IFRS, US GAAP and national standards. They make financial reports consistent and comparable.
Related Terms in Accounting Principles
Golden Rules of Accounting
Traditional rules for recording entries by account type: debit the receiver and credit the giver (personal), debit what comes in and credit what goes out (real), and debit expenses and losses and credit incomes and gains (nominal).
Nominal Account
An account for incomes, expenses, gains and losses, closed to the profit and loss at period end. It contrasts with real accounts (assets) and personal accounts (people and entities).
Real Account
An account for assets and property whose balance carries forward from one period to the next rather than being closed to profit and loss. Examples include cash, inventory and equipment.
Personal Account
An account relating to persons or entities a business deals with, such as customers, suppliers and lenders. Its balance represents amounts owed to or by those parties.
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