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Materiality concept is a GAAP relating to the importance/significance of the account or transaction.
This could affect the influence on the economic decision of a user.
It allows a “cutoff point” where the information is no longer useful.

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This GAAP could be violated by the recording of a broken pencil to the companies books. Unless the transaction is over 5% of the company’s net income, there is no need to record it

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GAAPs were changed to IFRS.
The IFRS is a set of accounting principles that is more international where as GAAPs were different in every country.
They changed them for reasons such as international trading.

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Assets and liabilities are valued at the actual cost to the business
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The value cannot increase or decrease over time, even if the owner thinks that the value has changed
This principle is used because it is easiest to use the original purchase price to verify the value
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If you buy a house for $30,000 and it was later appraised at a higher price, the recorded value of the land would remain $30,000

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The owner of a business bought a car for
$37,000
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They spent $3,000 upgrading it to match their business’ colors
The owner decides that the car is now worth $40,000 and they record it as such in their accounts
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This is breaking the GAAP because the car should still be recorded as the price at which it was obtained, the value should not change

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The GAAP is beginning to be globally standardized, IFRS- International Financial
Reporting Standards are now used so that the rules are the same everywhere in the world
In some countries, local accounting principles are applied for regular companies but listed or large companies must conform to instead to the GAAP, with the IFRS this problem will be solved
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This will make international comparisons as easy as possible

The Principle of Conservatism helps accountants decide between two or more values, and which is more conservative to record. When there are two acceptable values an accountant would pick the value that will result in less net income. This is done so that the accountant does not overestimate the worth of the business. It is important to remember that this principal does not state that an accountant should be conservative and motivate them to beat down a company's earnings and assets but to be fair and objective. In summary, it is used to “break a tie” between two reasonable options.

A simple example of when an accountant would break this
GAAP is when they are given the option of recording the total worth of the building when the company purchased it ($100 000) or the worth of that building in the future ($140 000).
To break this principle, the accountant would chose the more optimistic option of $140
000 which would result in a higher net worth of the business.

There has been an effort to converge Generally Accepted
Accounting Principles (GAAP) and the International Financial
Reporting Standards (IFRS), since 2002. Financial Accounting
Standards Board has expected this change to happen at the end of
2013. This decision will avoid complications and conflict within any financial problems in a company.
-By converging GAAP and IFRS, every business in the world will have to follow the same accounting rules. Prior to this change in GAAP, many countries used IFRS and some GAAP. GAAP is more of a rule based method, whereas IFRS is principle-based so converging these two accounting principles was not an easy task.

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Requires accountants to apply the same methods and procedures from period to period
If the method wishes to be changed, the accountant must clearly state why this change is beneficial to the statements
This concept is important because of the need for comparability, so that investors and other users of financial statements can easily correct and compare the financial statements of a company.

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The consistency principle is the most frequently ignored when managers of a business are trying to report more revenue than would be allowed through a strict accounting standards.
Examples of this are:
A company changing their fiscal period from monthly to quartly without proper disclosure
If a company has a history of using the FIFO (first in, first out) cost flow assumption, readers of the company's most current financial statements have every reason to expect that the company is continuing to use the FIFO (first in, first out) cost flow assumption. If the company changes this practice and begins using the LIFO (last in, first out) cost flow assumption, that change must be clearly disclosed.

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Gave up the Canadian generally accepted accounting principles (GAAP) and switched to international financial reporting standards (IFRS)
GAAP standards are more rule-based and the converging will make them become principlebased, allowing for more professional judgment and interpretation
For example, Canadian GAAP does not cover accounting for agricultural activities while there is a specific IFRS on that issue
But Canadian GAAP has certain industry-specific standards while IFRS does not

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1.Accounting policies need to be disclosed because they help understand the basis of accounting.
2.Details of contingent liabilities, contingent assets, legal proceedings, etc. are also relevant to the decision making of users and hence need to be disclosed.
3.Significant events occurring after the date of the financial statements but before the issue of financial statements (i.e. events after the balance sheet date) need to be disclosed.
4.Details of property, plant and equipment cannot be presented on the face of the balance sheet, but a detailed schedule outlining movement in cost and accumulated depreciation should be presented in the notes.
5.Tax rate is expected to change in near future. This information needs to be disclosed.
6.The draft for a new legislation is presented in the legislative of the country in which the company operates. If passed, the law would subject the company to significant cleanup costs. The company has to disclose the information in the notes.
7.The company sold one of its subsidiaries to the spouse of one of its directors.
The information is material and needs disclosure.

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Canada is saying adieu to Canadian GAAP and hello to
International Financial Reporting Standards (IFRS).
The original vision of aligning Canada’s standards with U.S.
GAAP is not working out as intended, and a change in direction was required. U.S. GAAP is too rule-bound, detailed, and expensive to use, not to mention inappropriate for the smaller Canadian market.
IFRS, on the other hand, are much more compatible with
Canadian standards. They strike a good balance between rules and principles.

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An accounting principle that states that a company’s financial information must be based on verifiable data.
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All transactions must be able to be verified that it actually happened.
In other words all transactions must have evidence that it happened through physical evidence such as receipts and invoice.

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A customer walks into your store and buys one of your products. You know the price of the product and the customer gives you exact change. So you do not ring it into the cash register meaning that you do not have a receipt or proof of sale.
Later on, your accountant notices that you have more money than you should have.
You explain the scenario. Your accountant says that he is unable to record the transaction since there is no physical evidence.

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The GAAP is being replaced with the IFRS
(International Financial
Reporting Standards)
This is because the IFRS will be universal so that the rules will be the same everywhere instead of it being specific for different places in the world.

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An oil and gas firm operating in
Nigeria and in the country there is a forseeable shortage of oil available. The business can not prepare their books as if they will be closing their operations in
Nigeria in the near future.

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The switchover to international, Reporting
Standards has begun and is hoping to be implemented by the end of the year (2013)
The Canadian Accounting Standards Board (AcSB) has decided that accountable enterprises must use the IFRS

The monetary unit assumption requires that companies include in the accounting records only transactions data that can be expressed in terms of money. This assumption enables accounting to quantify (measure) economic events. The monetary unit assumption is vital to applying the cost principle.

This assumption prevents the inclusion of some relevant information in the accounting records. For example, the health of the owner, the quality of service, and the morale of employees are not included. The reason:
Companies cannot quantify this information in terms of money. Though this information is important, only events that can be measured in money are recorded.