Write 3 pages thesis on the topic accounting standards board. Accounting Standards Board (ASB) believes that the statement of principles is a narrative of the fundamental approach underlining the fina

Write 3 pages thesis on the topic accounting standards board. Accounting Standards Board (ASB) believes that the statement of principles is a narrative of the fundamental approach underlining the financial statements of all profit oriented businesses.This approach is intended to be up-to-date,consistent internally and should also be in line with all other approaches adopted in the world.Despite the statement of principle assisting in the preparation of the accounting standards,they are also used by preparers and auditors who are faced with new or emerging accounting issues in order to assist them to carry out initial analysis of the issue involved.When reporting the financial position and performance of the firm, the financial statements need to reflect the effect of all transactions of the firm. This can only be achieved by specifying and classifying the items in terms of elements. These elements include:

Gains: This is defined as the increase in the ownership interest. This occurs when the company has made a profit after deducting all the expenses from the sales. For example if a business sells a commodity for 4000 and this commodity had cost it 2500. Then we are told the commodity incurred operating expenses of 300, and then we can say the commodity had a gain of 1200. (Lynn, 2004)Losses: This is defined as a decrease in the ownership interest. This occurs where the business has more expenses than the sale price. For example, if one buys his goods at 1000 and sells them at 1200, we need to deduct the cost price and other operating expenses from the selling price.