http:/www.lxws.net 留学生论文专业定制代写网站留学生essay写作财务论文范例GAAPDiscuss what is meant by the term GAAP and whether it meets the needs of all UK entities.IntroductionGenerally accepted accounting principles or GAAP refers to a set of principles,rules,methods and conventions that provides detailed guidelines and procedures for the preparation,presentation and handling financial and accounting cases.Institute of Chartered Accountants in England and Wales(ICAEW)defines“Generally Accepted Accounting Practice(UK GAAP)as the body of accounting standards and other guidance published by UK Accounting standards Board(ASB)”.In the UK,Financial Reporting Council(FRC)is responsible for setting accounting standards by working closely with national and international accounting standard-setters in order to influence the development of standards.In 2009,ASB proposed a strategy for the future of UK/Irish GAAP and its convergence with International Financial Reporting Standards(IFRS).The intention was to work under the IASB framework which provides detailed guidelines and procedures in the need of all UK entities,hence,cease the existence of UK GAAP.The Boards proposals set out a three Tier system of differential arrangement based upon public accountability.UK entities would need to determine the appropriate framework to transition,as well as the impact of change to their financial reporting,tax status,business processes and operations in general(Ernst&Young,2011).Currently in the UK,only entities listed on the regulated market are required to file their accounts in accordance to IFRS,whereas all other UK entities are permitted to use wither IFRS or follow UK GAAP.ASB(2009)proposed three new standards,FRS 100,FRS 101 and FRS 102,that replace all current UK standards.By December 2014,UK GAAP will cease to apply to the financial statements and becomes mandatory for all UK entities for the year end December 2015 or from January 2015 but this is subject to early adoption provisions(ASB,2009).Early adoption of FRS 101 is allowable without restriction whereas FRS 102 can be allowed on or after the accounting year end 31 December 2012(PWC,2013).The impact of each FRS is briefly discussed below.Needs of UK entitiesEntities are of different types of varied sizes with different shareholding and management.Every entity has its own properties but has to act in accordance to the local laws and accounting standards when reporting that gives a user clear picture and nature of business performance.In accounting,“True and Fair View”plays a pivotal role in reporting and presenting financial statements.It remains a fundamental part to accounting within the local and international laws.Under company law,an entity is a separate legal body from its owners.A large entity can be easily distinguished who the owner/manager is,unlike sole traders where it is quite difficult to get a clearer picture although the business forms a separate identity.Charitable organizations,government bodies and some entities have different ways of reporting and in some cases they do not follow UK GAAP in full.Instead,they follow the rules and guidance prescribed by the state and the civil law.True and Fair view in terms of accounting standards may not be true and fair in terms of tax and to get a clear picture of business transactions,some items should be shown as expenses that wouldnt be allowed for tax(Sweetman,2009).Sweetman(2009,p.4)argues,“Very small businesses are unlikely to have fluctuations from year to year in most levels,and if in hard times the list of creditors grows then it seems reasonable to tax what is received rather than what may be received one day”.Listed and regulated companies are already following IFRS guidelines and procedures for preparation and reporting financial statements but not all entities are in the regulated market and listed.GAAP varies from nation to nation and hence comes IFRS to come into action.Not all the needs of all UK entities are met by GAAP.It may be because of the nature of transactions an entity has.Trading has become global and most companies,from small to large,trade across the borders and in different countries that have different set of rules and regulations which are to be followed in terms of exchange,tax regimes and other accounting standards.Since the globalisation of the business,a single accounting system has been a major debate for all accounting standard setters in the world.There has been a long standing debate for the convergence of UK GAAP into the IASB framework and this has become a reality following the strategic approach taken by ASB in the past few years.ASBs Strategy for UK GAAPIn 2009,ASB proposed a“Three-Tier”approach to the transition of UK GAAP into IFRS to the fullest extent possible with the needs of UK entities.This three-tier approach was based on the public accountability.Tier 1All listed and regulated market entities are to follow EU adopted IFRS under this account