QCA Accounting Guidelines

The QCA's Accounting Standards Committee have produced this statement of accounting principles.

QCA Accounting Guidelines / Principles

• Accounting standards should be principles based and understandable by the non-technical user.
• Accounting standards should reflect economic reality and focus on cash flow not based on untested theoretical concepts. Accounting standards should not give rise to behaviour which drives business decisions that are not in the economic interests of the business entity.
• The cost of implementing any accounting standard should be rigorously assessed to consider whether the benefits outweigh the cost – this analysis should be disclosed as part of the standard.
• The views of all users should be taken into account in equal measure not simply the analysts when deciding what disclosures are required. In particular, consideration should be given to the cost of providing any disclosures.
• Understanding the underlying earnings of a company or profit before tax is an important element for all preparers and users of the accounts and should be retained.
• Fair value is important but only when it can be readily determined. The proliferation of models undermines the usefulness of the accounts because it increases rather than diminishes the range of outcomes.
• Convergence with US GAAP should not be seen as the desired outcome when considering an accounting standard.