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The Accounting Profession is governed by Principles, Concepts and Conventions. For an accountant to practice his career/profession with complete effectiveness, he has to put their knowledge and application into practice. i. The Accounting Concepts are as follows: ii. Current Cost i. Historical Cost iv. Prime Cost v. Overhead Cost and vi. Extensible Business Reporting Language
Current Cost
Current cost accounting is a valuation method whereby assets and goods used in production are valued at their actual or estimated current market prices at the time the production takes place (it is sometimes described as “replacement cost accounting")
Historical Cost
Historical cost is a term used instead of the term cost. Cost and historical cost usually mean the original cost at the time of a transaction. The term historical cost helps to distinguish an asset's original cost from its replacement cost, current cost, or inflation-adjusted cost. For example, land purchased in1992 at cost of $80,000 and still owned by the buyer will be reported on the buyer's balance sheet at its cost or historical cost of $80,000 even though it’s current cost, replacement cost, and inflation-adjusted cost is much higher today.
Prime Cost
The direct cost of a commodity in terms of the materials and labour involved in it’s production, excluding fixed costs.
Overheads Cost
The indirect costs or fixed expenses of operating a business (that is, the costs not directly related to the manufacture of a product or delivery (operating expenses of a business, including the costs of rent, utilities)
Extensible Business Reporting Language
XBRL is a freely available and global standard for exchanging business information. XBRL allows the expression of semantic meaning commonly required in business reporting
Extensible Business Reporting Language (XBRL) is an open internet standard built on an XML base. While XML and HTML are functionally similar, for data transfer, analysis, and preservation, XML offers more convenience and flexibility. XBRL’s main goal is to lower the overhead of data exchange, and simultaneously raise the accessibility of information. Through the internet, XBRL provides more timely access to information and increase its ultimate utility. XBRL creates standardized environment where users can use the internet to prepare, broadcast, exchange and analyze financial information. n addition to XBRL’s automated financial data exchange and extraction being independent of information systems and software limitations, XBRL also reduces the need for different formats and input duplication. This allows users to compare and retrieve financial information directly, resolving the problem of inability to directly compare financial information in different formats.XBRL helps reduce costs related to financial reporting preparation, and creates more opportunities for investors and analysts to access financial information, and enhances the integrity and comparability of of the business reporting information
ii.Historical Cost.
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