This website uses cookies to ensure you have the best experience. Learn more

True And Fair View Essay

1132 words - 5 pages

Reporting Entities in New Zealand nowadays are required to provide a true and fair view when they disclose their financial reporting, namely, financial position, financial performance and cash flows. This requirement is not new; it can be traced down to the United Kingdom in 1844. As a colony, New Zealand followed this way. Because there is no legislative definition about the real meaning of the true and fair view since its appearance, the Companies Act 1993, in conjunction with the Financial Reporting Act 1993 reduced the concept's overriding position, and made it a supplement to generally accepted accounting principles (GAAP) since1993 due to ambiguousness and imperfectness. This change probably indicates the true and fair view need to be defined clearly and consummated with time. However, I still think it should remain as part of the regulatory and professional requirements for financial reporting in New Zealand not be replaced or removed.Since 'true and fair' has not been given an authorized definition, analysing the basic literal meaning of the concept is to be indispensable. One is the meaning of 'true' and 'fair' in this phrase. Do they signify the same thing? They both emphasize the nature of the concept that is the truth, although they might vary according to the changing situations and accounting environments. Most Australian directors and New Zealand auditors treat true and fair as equivalent in meaning. (Kirk, 2006, p.209) The other one is the relationship between 'true and fair', 'fairly reflect' and 'fairness presentation'. In New Zealand Preface, the terms 'fair presentation' and 'fairly reflect' have the same meaning as 'true and fair view' (NZ Preface, Para. 8, ICANZ, 2005).These all try to focus on the substance of the concept instead of the form.Furthermore, how is the inner relationship about the concept of the true and fair view and framework of accounting standards and report? Mostly, people perceive the true and fair concept from three aspects. The first one is a superior accounting standards requirement over others; the second one is compliance with GAAP; the last one is a supplementary in case of any unpredictable eventuality that legislations do not cover (Walton, 1993). In current New Zealand Preface (ICANZ, 2005, p. 5, cited by Kirk, 2001)), it refers to the last two of above, and states that:" In order for general purpose financial reports to show a true and fair view it is necessary to comply with generally accepted accounting practice" (paragraph 8)." In the rare circumstances that compliance with generally accepted accounting practice does not result in the financial reports giving a true and fair view, additional information and explanations are to be provided in order to give a true and fair view"( paragraph 9).This indicates that complying with GAAP is now seen as the important evidence when judging if financial reporting gives a true and fair view or not. However, it seems to say there are some aspects where...

Find Another Essay On True and fair view

Fair Trade: A Mutually Beneficial System

1586 words - 6 pages Fair Trade is a trading partnership that seeks greater equity in international trade by maximizing the benefits of the stakeholders involved (“WFTO”). Nearly all (93%) of the Starbucks Coffee Company coffee was ethically sourced through Coffee and Farmer Equity (C.A.F.E.) practices, which include the fair trade system (“Responsibly Grown”). In January 2013, more than 1.2 billion profits from the sale of Kit Kats supported over 7,000 fair trade

Reflection and Objection on John Rawls

549 words - 2 pages injustices. There would be mutual respect amongst all of them, and they would all do their fair share to better the society.Everything that Rawls says sounds pretty good on paper. It is a hypothetical, idealistic view of life and human nature. However, his ideas cannot be taken into practice, which makes his whole philosophy sort of useless. Everything he bases the idea of a perfect society on is based on two impossible ideas: the veil of

In between lectures, participants in the programme are required to go through a given amount of work on their own, i.e. self-study.

1341 words - 5 pages relevant as possible information of an economy body which needed by general users. What kind of method ought to use has become a big issue on financial reporting to provide a true and fair view of a matter of businesses. The historical cost principle is being categorized as traditional reporting method, which does not have the ability to contain the changes in prices. The selling price use to mention at current price despite the fact that cost of


842 words - 3 pages The relationship between law and standardsCompanies act formed in 1900 - compulsory audit of the balance sheet - not the director.Bigger business, role of directors determined by shareholders - appointing auditors, the requirement for a consistent approach.1948 Companies act - balance sheet and profit loss account must give a true and fair view, disclosure levels introduced, audit requirements established. The accounting profession took on more

Focus on the Fair Value

1270 words - 5 pages acquiree's identifiable net Assets. Goodwill is the amount paid by the acquirer in excess of the fair value of the identifiable net assets. For example if the purchase price =$400, the fair value of the identifiable net Assets =$320 the book value of Net Assets=$200; then the fair value increment=$120(320-200) and Goodwill=$80(400-320). Currently Accounting Standards are consistent with the parent view of the consolidated entity.The parent view

Most not Be Evident

878 words - 4 pages others. One of the singular facts for Enron collapse was inappropriate measurement of some of its assets (Benston, 2006, p.465), since there have been debates on choice of asset measurement methods; This paper therefore discusses some methods of asset measurement and analyzes, from the stakeholders’ perspective, which of them provides the most useful and true and fair view of an organization. Asset measurement Models There are various models

Fair Trade and Coffee in Third World Countries

1167 words - 5 pages years before when only 4.2 million pound of coffee was purchased. (Jaffee, 2012) The fair trade market skyrocketed over that time; Starbucks, Nestlé and other huge coffee companies around the world being hugely associated with it. The market trends arose significantly because the fair trade model became a popular way to market companies to their consumers. While this was happening, the true purpose of fair trade was being forgotten. In the end

1933 Chicago World's Fair

1840 words - 7 pages Electrical Group are the Halls of Communication (four tall green pillars) and Social Sciences (tan roof, blue sides). Beyond these buildings the base of the Sky Ride can be seen as well as the triangular arrangement of the Federal Building and Court of States. The Back cover of the book folds out to continue the panoramic view and show the mainland portion of the fair, including the Hall of Science, the Travel and Transportation Building, and the

The Basic Concepts Upon Which Financial Accounting is Based

2020 words - 8 pages permitted layouts [called formats] for the balance sheet and profit and loss, account items. These rules are called Accounting Standards. In order for auditors to be satisfied that the balance sheet and profit and loss account provide a "true and fair view" of actual transactions they will examine internal controls, which must be operating effectively in the business. These controls need to be installed and maintained

Ambiguousness and Equivocation in Macbeth

1162 words - 5 pages that Birnam Wood will come to Dunsinane Hill at the time when Macbeth is defeated. The rebellion army camouflage themselves in order not to be seen, but from another point of view, it will seem that the very trees are moving. Once again, if Macbeth had been more diverse in his understandings, perhaps he would have lived a full and happy life as King of Scotland.To look more closely at the character aspect of the quote "Fair is foul and foul is fair

Copyright Law: Fair Use

1805 words - 8 pages Copyright Law – Fair Use Imagine oneself in a predicament where someone’s work was used in a negative way and the copyright owner disapproved of the harsh display. How would the issue be resolved? Was it used fairly? In many cases people find themselves with their work viewed in a negative manner. However, this is where fair use is a probability. Fair use is somewhat a replication of copyrighted work completed for a restricted purpose, for

Similar Essays

True And Fair From The Accountants' Perspective

1754 words - 8 pages point of view, it can be seen that investors desire information about true and fair value as to know the current value of their investments, and at the same time historical information to provide a measure to indicate whether or not management has met the targets outlined in the budget. If this information given cannot be seen to be true and reliable, it is void in nature as it does not meet the conceptual framework requirements set out by AASB and

Title: Fair Is Foul, And Foul Is Fair Macbeth: Who Is The True Villain In The Play?

1330 words - 5 pages “Fair is Foul, and Foul is Fair”"I believe that there is only one story in the world...Humans are caught--in their lives, in their thoughts, in their hungers and ambitions, in their avarice and cruelty, and in their kindness and generosity too--in a net of good and evil...A man, after he has brushed off the dust and chips of his life, will have left only the hard, clean question: Was it good or was it evil? Have I done well--or ill

"The Principle Of Historical Cost Is Still Used In Accounting When There Is A Large Measure Of Agreement That It Is Inappropriate." Discuss

1225 words - 5 pages other valuation methods exist 'Fair Value Accounting' is the most popular alternative. The Fair Value of an asset is the amount at which that asset could be bought or sold in a current transaction between willing parties, other than in liquidation (GAAP 2004). This is important for businesses as, by using this valuation method, financial statements reflect the current value of company assets and thus true state of company solvency. Increased

Critical Thinking: The Ability To Think For Ones Self

1226 words - 5 pages through frustrating intellectual challenges. This is true in every subject we may encounter such as math and chemistry. “… the most important questions we will reason through in our lives most likely will be complex and, therefore, will require not speed but diligence and intellectual discipline” (Paul & Elder, 2006, pg. 15). In order to be fair minded to the views of others, we must be perseverant when analyzing another’s belief and how that