Comparison And Improvement Of Accounting Elements

Abstract: the division of accounting elements directly affects the realization of accounting objectives and the establishment and application of accounting methods.

Accounting elements are not only a structural concept, but also a dynamic concept.

The accounting element is a multilevel structure, including basic elements, sub elements and supporting elements.

At the same time, the content and structure of accounting elements are constantly changing.

The influence of environmental culture on financial accounting system mainly involves two aspects: accounting recognition and accounting measurement.

Accounting recognition and measurement are inseparable from accounting elements.

The emergence of new economic system, new economic mode and new economic type is first manifested in the impact on the content and structure of accounting elements (system), of course, this effect is carried out through accounting objectives.

As far as financial accounting itself is concerned, accounting elements and their internal links are the basis for the establishment of accounting methods, which directly relate to the realization of accounting objectives.

Therefore, accounting standards institutions in various countries attach great importance to the study of accounting elements.

In this paper, we try to compare the accounting requirements of China, the US financial accounting standards board (FASB) and the international accounting standards board (IASC), and put forward some views on accounting elements in the new economic environment.

First, the comparison of accounting object elements, accounting elements of 1.FASB.

In December 1985, FASB published the sixth financial accounting concept Bulletin (SFAC NO.6), which divided the accounting object into 10 elements: assets, liabilities, equity or net assets, owner investment, assignment to owners, income, expenses, profits, losses, and comprehensive income.

Among them, "owner investment" and "assign to owners" are pactions between enterprises and their owners.

The owner's investment is the property that the enterprise receives all kinds of assets invested by the proprietor (the input can also be labor service, or the compensation and conversion of the enterprise liabilities). The result is "increasing the owner's interests or interests in the enterprise", but the new owner's assignment of the old owner is not the content of "owner's investment".

Obviously, in terms of economic essence, the elements of owners' investment and the main elements of distribution are further deepening the content of rights and interests elements.

FASB used narrow sense concepts of "income" and "cost".

Income refers only to the income of normal business activities and investment activities, based on the "income theory of pfer process", emphasizing the complete process of income realization.

The cost refers only to the correct operating expenses or expenses, based on the matching principle and accrual basis accounting principle, emphasizing the causality and the reasonable attribution of the cost responsibility.

For abnormal operating income, FASB set up a "profit" element to reflect it, because profits are essentially "incidental" and "marginal" net income.

The "loss" factor should be set up to reflect abnormal regular activities, because loss is essentially a "net loss" of "incidental" and "marginal".

There is no causal relationship between profits and losses, no need to be confirmed according to the principle of proportioning.

"Comprehensive income" is merely the result of regular aggregation of revenues, expenses, gains and losses.

The accounting elements of 2.IASC.

In 1989, IASC published the "framework for compiling and providing financial statements". It identified the accounting elements as assets, liabilities, property rights, income and expenses, etc. 5.

IASC chooses the concept of "income" in broad sense based on the theory of "flow volume" confirmed by revenue.

IASC believes that profits, like income, represent "increasing economic interests". They are not different in nature, so they do not take income and profits as different accounting elements.

The generalized income factor corresponds to the generalized "cost" element.

According to IASC's understanding, the cost includes not only the expenses occurring in the daily activities of enterprises, but also the "loss", and the loss is defined as "the reduction of economic benefits" and "there is no difference in nature between other costs", so the loss is not regarded as an independent accounting factor.

IASC further believes that from the point of view of accounting recognition and measurement, the recognition and measurement of income and expenses is the recognition and measurement of profits. Therefore, it is not necessary to set up accounting elements like "profit" separately.

3. accounting elements of our country.

In the enterprise accounting standards promulgated in 1992, China has clearly established 6 major accounting elements: assets, liabilities, owner's equity, income, expenses and profits.

According to the interpretation of the specific criteria of income, income refers to the total inflow of economic interests formed by enterprises in daily activities such as selling goods, providing services and using assets of other enterprises.

Obviously, the income is a narrow sense of the family, and only includes the income from the continuous production and operation activities of the enterprise.

The enterprise accounting standard defines expenses as "all kinds of expenses that happen in the course of production and operation of enterprises", which means that expenses only include production and operation expenses related to the production and operation activities of enterprises, instead of "non investment and operating expenses" such as "investment cost" and "extra business expenses".

China has set up a "profit" element separately, and stipulates that it includes "operating profit", "net income from investment" and "net operating income and expenditure".

The profit factor includes both the aggregate result of other elements and its own specific content, which is different from FASB's "comprehensive income".

4. points of comparison.

Through the above analysis, we can see that FASB, IASC and China's assets, liabilities and owners' equity (or rights and interests) are basically the same in terms of essential definition and content regulation.

The difference lies in the fact that FASB attaches great importance to the changes in the interests of owners (investors). Therefore, the exchange between enterprises and owners leads to quot; the increase of rights and interests and the reduction of rights and interests.

The difference between them is the establishment of factors such as income, expenses and profits. 1, FASB and China's accounting standards, based on the theory of "turnover process income", emphasize the causality between income and related costs and expenses, and choose the concept of income factor in narrow sense.

But the difference is that when defining the contents of income elements, FASB is based on the importance of pactions (such as "continuous, main or core business"), while China is intuitively based on the contents of the economic business (the basic accounting standards of China and the specific criteria of "income").

Unlike FASB and China, IASC is based on the theory of "flow volume" to establish the "income" elements including business income and profits, and chooses the concept of generalized income factor in 2.

The reason is that IASC thinks that the same nature of income and profit is "an increase in economic interests", so there is no need to separate separate accounting elements.

FASB and China corresponded to the establishment of income factors. FASB and China adopted the concept of "cost" in narrow sense.

However, FASB also emphasizes the importance of cost paction. It considers that the elements that can be included in the cost elements refer to the expenses incurred by enterprises in "continuous, main or core businesses", while China limits the cost elements to "all kinds of expenses incurred by enterprises in the course of production and operation".

IASC adopts the generalized concept of "cost".

(4) the "income" and "expenditure" generated by pactions that are not directly related to the production and operation process of enterprises (i.e., China's commonly known "extra business income" and "non operating expenses") are based on the characteristics of "marginal or incidental" and no causal relationship between the revenues and expenditures. FASB set up the elements of "gains" and "losses" separately.

However, IASC regards them as the elements of "income" and "cost" respectively.

FASB (5) set up a "comprehensive income" element for the business performance gained by a company in a specific period, and set its content as "ten gains and losses". "China has set up a" profit "element to reflect its content, which is the same as the" comprehensive income "of FASB.

Although IASC does not establish a separate "profit" element, it equates the recognition and measurement of revenues and expenses to the recognition and measurement of profits. Therefore, the content of IASC's business performance (i.e. profit) is essentially the same as the "profit" or "comprehensive income" mentioned above.

In determining the performance of enterprises, FASB, IASC and China all adopt the "profit and loss view" (or "comprehensive income view").

On the whole, FASB, IASC and China's accounting elements have their own advantages. Two.

All three have established the basic elements of accounting objects, but they have neglected the definition of other levels.

In the basic elements established, IASC's result is more reasonable.

Although FASB involves the establishment of secondary level elements, such as "owner investment", the interrelationship among all elements can not be explained.

China's accounting standards basically absorb the advantages of FASB and IASC.

However, the author believes that there are two major defects in the establishment of the above accounting elements: the theoretical defects are neglecting the decisive factors that affect the establishment of accounting elements; the defect in practice is that the existing accounting elements can not provide theoretical explanations for accounting methods (such as the theoretical basis of various financial statements) and the lack of proper internal logical relationship between accounting elements.

The establishment of accounting elements depends mainly on the characteristics of the entity's economic activities and the requirements of investors for accounting information provided by enterprises.

The purpose of establishing accounting elements is to standardize the understanding of accounting objects and their laws (expressed as accounting elements and their internal relations), laying the foundation for the normal operation of accounting information system.

Accounting object elements and their relationships are the theoretical foundation for the establishment and application of various accounting methods.

Including accounts, double entry bookkeeping, accounting recognition and measurement, financial statements and so on, and the application of accounting methods is directly related to the satisfaction of investors and other accounting information needs.

Therefore, the definition of accounting object elements not only affects the choice and application of accounting methods, but also relates to the degree of realization of accounting objectives.

The characteristics of economic environment and enterprise economic activities affect the establishment of accounting target elements.

There are great differences between profit organizations and non-profit organizations in terms of the objectives and characteristics of economic activities, so the establishment of their accounting target elements is also different.

The characteristics of the economic activities and the specific accounting objectives of the non continuous operation enterprises are different from those of the continuing run enterprises.

For example, the elements of accounting objects of liquidation enterprises are liquidation assets, liquidation debts, net liquidation interests, liquidation gains and liquidation losses.

The accounting objective of accounting is the purpose of accounting recognition, measurement, recording and reporting. It is the connection point between accounting system and social economic environment. It reflects the objective requirements of the economic environment of enterprises and the inherent needs of investors for accounting information.

The establishment of accounting target elements is deeply influenced by accounting objectives. Because the inclusion and extension of accounting objectives are always changing and deepening along with the changes of social and economic environment, the division of accounting objects and the importance of different elements are invariable.

With the continuous innovation of financial derivatives and the rapid development of other new types of pactions, the investors' demand for accounting information has been expanded to a great extent in the breadth and depth of the accounting information.

Correspondingly, the establishment of accounting object elements is also undergoing profound changes.

In October 1992, the British Accounting Standards Board (ASB) issued the ARS NO.3 (No. third). Aiming at the defect that the profit and loss statement under the traditional financial accounting system only reveals "realized and confirmed" income and can not satisfy the investors' demand for "true and fair" information, it puts forward the idea of affirming the "comprehensive income".

This criterion extends the contents of the profit and loss account from the "realized and confirmed" item to the "unrealized and confirmed" item, and in the broad sense of "gains" and "losses" elements, considers that profits are "addition to owners' interests other than those involving owners' investments", which include income and other gains in content, and losses are "reduction in owners' equity other than those allocated to owners", including expenses and other losses in content.

It happens that there is a similar case.

In 1997, the United States promulgated the "13C SFAS NO.130" requirement to report the "comprehensive income" of enterprises. In fact, it is a similar practice.

Therefore, we should recognize the elements of accounting objects and establish problems with the concept of development and change.

The impact of changes in economic environment and accounting objectives on accounting elements is mainly reflected in the improvement of the structural system of accounting elements and the extension of the connotation of accounting elements (such as "expansion" of elements such as gains and comprehensive gains).

In my opinion, the object of accounting is essentially a family.