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Accounting Standards

Subsequently to the collapse of Enron, the UK government set up a high level group of regulators and ministers to co-ordinate a review of the UK regulatory framework, especially the key area of auditor independence. The Accountancy Foundation Review Board, which was in charge of the independent supervision of the UK accountancy professional bodies, took the leading role in the auditor independence review.

 

 

One option is to register this as an Inventory (current assets) and more specifically work-in-progress (WIP) stage. But there is a risk with assets because the future benefits inherent in the asset are never certain in amount. The general criteria require than an asset or liability should be recognised only where it can be measured with sufficient certainty. Another option is to present this transaction with 'linked-presentation'. The third option is to register both transactions- Project A and B as an investment (current expenses) for future research and developments.

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