Lecture Notes
Accounting - Lecture Summary
Lecture 1: Introduction
- Accounting provides information to:
• Make decisions
• Inform people having an interest in the firm (investors, owners, employees, etc.)
• Fulfil duties to society (e.g. pay taxes)
• Summarise all kind of actions, decisions, results, transactions into figures to steer the business
and inform stakeholders
- To illustrate what accounting is:
- Accounting can be seen as a language, where different dialects exists. For instance, if you go to
IBM, they calculate net incommode on the basis of US accounting principles. Where, a Japanese
company may calculate net income on the basis of Japanese accounting principle.
- The general accepted accounting standards (the main standards used):
• GAAP
• FASB
• IFRS
• IASB
Standard setters make a rule based on how users of accounting information get the most relevant
and reliable information.
!1
Accounting - Lecture Summary
Lecture 1: Introduction
- Accounting provides information to:
• Make decisions
• Inform people having an interest in the firm (investors, owners, employees, etc.)
• Fulfil duties to society (e.g. pay taxes)
• Summarise all kind of actions, decisions, results, transactions into figures to steer the business
and inform stakeholders
- To illustrate what accounting is:
- Accounting can be seen as a language, where different dialects exists. For instance, if you go to
IBM, they calculate net incommode on the basis of US accounting principles. Where, a Japanese
company may calculate net income on the basis of Japanese accounting principle.
- The general accepted accounting standards (the main standards used):
• GAAP
• FASB
• IFRS
• IASB
Standard setters make a rule based on how users of accounting information get the most relevant
and reliable information.
!1
