Accounting as a Language Essay Example for Free

method of accounting as a Language EssayAccounting is often referred to as the lyric poem of business. It is a special-purpose tool for communication about the m hotshottary statements and the performance of a fellowship. This can happen through written, natural language by selecting words from a standard wording combining them in meaningful ways. These words atomic number 18 then organised into financial reports according to comparatively flexible rules of presentation. Accounting dates back to 1494 when Luca Pacioli published a book called Summa de Arithmetic. It Around the 15th century, accounting records were base amongst ruins of ancient Babylon, Assyria and Sumeria. It is suggested that people relied on accounting methods to record the growth of crops and herds. During the Roman Empire, accounting was quantified and listed as a public expenditure which included grants of land and religious offerings. Money to army veterans was also given. Current Issues touch on Acc ounting as a language The decline of the U. S dollar is a perfect object lesson of an issue that affects accounting as a language. The objective of accounting theory is to provide a background for the prediction and to explain accounting behaviour and its events. This theory assumes that a stable monetary unit is present. escort more Social process essayFurther decline in the purchasing power of the dollar has affected all realities and its associated languages. Events like this play a vital role as to whether a tonic language of bookkeeping needs to be implemented. Accounting language must develop theories which are rational. on that point may be instances where a procedure does not appear to be reasonable. An example of this can be seen with the determination of joint product and by-product costs. The reason why this raises doubts is because it is difficult to allocate costs in a way that accurate costs can be obtained.In addition to accounting language theories being rationa l is its usefulness. Theories and conclusions are constantly being tested to measure the usefulness of the research provided. harmonise to Harold G Avery, many systems have been neglected as it was not useful in expressing the relevant randomness to management. It is safe to say that no language will receive acceptance if it cannot be used to an advantage, as this information is relied upon to make sound business judgements and needs to be readily available. So how is this information translated to the users?Ac as a language- Financial data is used to communicate the financial positions of a entity and then translates this to its motley users. It is pertinent that in order to evaluate the financial results of the entity, it is necessary that the financial statements of that particular company with any its financial results of the industry or the past results. Ratio analysis is used to trammel the status of the companys ability to pay its short and long term debts. It can also a nalyze to determine the company liquidity and debts levels, these indicators are critical in determining the business ability to continue operations into the future.IAS 1 prescribes the basis for presentation of general purpose financial statements intended to meet the needs of users who are not in a position to require an entity to prepare reports tailored to their particular information needs. IAS 1 does not specifically apply to the form, structure, and content of an interim financial report but many of the overall considerations as the need for fair presentation and consistency. Globally accounting is recognized as the tool for communicating the financial statements and performance.Without a clear structure for accounting language, businesses and users alike would suffer economically as the financial statements would not be fair and true, which would be costly to us all. Accounting data is used to germinate financial statements which depict a picture of entities profitability. This information enables accounting to translate this foreign language into one that is understood by its users. This purpose of this translation is to aide sound business decisions. Users who benefit from this can be shareholders, management, government, financial institutions and prospective investors.