Accounting as a Language Essay

method of be is often referred to as the speech of business. It is a special-purpose tool for communication about the fiscal statements and the performance of a ships company. This canisterister happen through written, natural language by selecting speech communication from a standard vocabulary combining them in meaningful ways. These spoken language are and then organised into financial reports according to relatively limber rules of presentation. accounting dates back to 1494 when Luca Pacioli published a book called Summa de Arithmetic. It Around the fifteenth century, accounting ledgers were found 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 disbursal which included grants of land and religious offerings. Money to army veterans was also given. legitimate Issues affecting Accounting as a language The decline of the U. S dollar is a perfect example of an issue that affects accounting as a language. The objective of accounting theory is to provide a nucleotide for the prediction and to explain accounting behaviour and its events. This theory assumes that a stalls monetary unit is present.See more Social process raiseFurther decline in the purchasing power of the dollar has touched all realities and its associated languages. Events like this play a vital role as to whether a new language of bookkeeping involve to be implemented. Accounting language must develop theories which are rational. There 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 wherefore this raises doubts is because it is difficult to allocate costs in a way that close costs can be obtained.In addition to accounting language theories being rational is its usefulness. Theori es and conclusions are constantly being tested to pecker the usefulness of the research provided. According to Harold G Avery, some(prenominal) systems have been unheeded as it was not useful in expressing the relevant information to management. It is steady-going 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 various users. It is pertinent that in order to evaluate the financial results of the entity, it is necessity that the financial statements of that particular company with either its financial results of the industry or the past results. Ratio analysis is used to determine the status of the companys ability to pay its short and long term debts. It can also ana lyze to determine the company liquidity and debts levels, these indicators are minute 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 pick up the needs of users who are not in a position to fill 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 solve 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 produce financial statements which depict a impression of entities profitability. This information enables accounting to translate this foreign language into one that is unsounded by its users. This purpose of this translation is to aide sound business decisions. Users who emolument from this can be shareholders, management, government, financial institutions and prospective investors.