Financial accounting is a process of measuring and converting business decisions into financial statements. Those statements are used as a means of communication with different stakeholders.
Every business decision involves financial items and these items are found in the financial statements.
- Business decisions
- Financial items
- Financial statements
The process of converting the business decisions into financial statements is governed by the Generally Accepted Accounting Principles (GAAP).
The process of converting business decisions into financial statements can be explained in one of the following ways:
- The rules of Debits and Credits; or
- The framework of Accounting Equation
In this book an effort has been made to explain the framework of accounting-equation. The rules of Debits and Credits have not been touched in this book.
We believe that though the accounting equation is innocuously simple, it has the ability to explain all types of business decisions.
D V Ramana
Sir,
Nowadays in ITES there are talks of integrated service and super apps where different types of services are integrated and business decision on acquisitions are also impacted from value addition of how well it integrates with existing services.
Is there a way to measure this type of value addition in accounting through GAAP or it is measured through non GAAP reporting?