Solution 13.2

The role of accounting standards and FRC

The purpose of accounting standards is to reducing the range of diverse accounting methods in operation as each method of accounting could lead to the presentation of a completely different profit figure. The accounting standards provide a unifying code of practice in preparing and presenting accounting information.

In July 2012 the financial reporting council (FRC) took over the role of setting accounting standards from the ASB. The FRC collaborates with accounting standard setters in other countries as well as the international accounting standards board (IASB) in order to influence the development of international standards and to ensure its standards are developed with due regard to international developments.