28 Account -- Basic Accounting Terminologies and Double Entry System

Point out the general objectives of Nepal Financial Reporting Standard (NFRS).

1 Answers

The general objectives of Nepal Financial Reporting Standards (NFRS) are as follows:

1. Enhancing Transparency: NFRS aims to improve the transparency and comparability of financial statements, enabling stakeholders to make informed decisions. By setting clear and comprehensive guidelines for financial reporting, it ensures that relevant and reliable information is provided to users of financial statements.

2. Facilitating Accountability: NFRS seeks to enhance accountability by establishing a framework that promotes the faithful representation of an entity's financial performance and position. It enables management to be accountable for their financial reporting and provides a basis for assessing an entity's stewardship over its resources.

3. Promoting International Consistency: NFRS aligns with International Financial Reporting Standards (IFRS) to promote consistency in financial reporting across different jurisdictions. This convergence with international standards helps facilitate comparability of financial statements, making it easier for investors, analysts, and other stakeholders to evaluate entities operating in Nepal.

4. Improving Decision-Making: NFRS aims to provide relevant and reliable information to users, facilitating better decision-making. By ensuring that financial statements present a true and fair view of an entity's financial position, performance, and cash flows, it helps users assess the entity's ability to generate future cash flows and make informed investment, credit, and other economic decisions.

5. Enhancing Investor Confidence: NFRS strives to instill confidence in the financial statements of entities operating in Nepal. By establishing a robust financial reporting framework, it aims to improve the credibility and reliability of financial information, thereby promoting investor confidence and attracting investment to the country.

6. Assisting Regulatory Compliance: NFRS provides guidance to entities to comply with the financial reporting requirements mandated by regulatory bodies, such as the Securities Board of Nepal (SEBON) and the Nepal Rastra Bank (NRB). It helps ensure that entities meet their legal obligations and report their financial information in accordance with the applicable regulations.

What do you mean by Nepal Accounting Standard (NAS) & Nepal Financial Reporting Standard (NFRS) ?

1. Nepal Accounting Standard (NAS): NAS refers to a set of accounting principles and guidelines that provide a standardized framework for recording, presenting, and disclosing financial transactions and events in Nepal. These standards are based on International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), with necessary modifications and adaptations to suit the Nepalese context. NAS aims to enhance the transparency, comparability, and...

What is Assets?

Assets are economic resources owned or controlled by individuals, businesses, or organizations, representing their potential to generate future benefits. They can include physical possessions, such as property or vehicles, financial instruments like stocks or bonds, or intangible assets like patents or trademarks.

What is Liabilities?

Liabilities refer to the financial obligations or debts owed by an individual, company, or organization. They represent the claims that others have on the entity's assets and can include loans, accounts payable, accrued expenses, and other obligations.