CHAPTER ONE
INTRODUCTION
We have now out lined a number of alternative approaches that the accountant could possibly take in preparing accounting reports. However, we are going to choose between them? How are we going to go about deciding the accounts we prepare? In the most general of terms the correct approach was suggested. We are the communicators of the information that people will find useful. We therefore have to discover who are our “customers” and what is it that they want from us, so we have to take note of some questions.
1. Who are users of accounting statement and accountant reports?
2. What do they want to use them for?
3. What particular information do they need to enable them to use them effectively for their purpose?
1.1. OBJECTIVES OF THE STUDY
1. The accounting objectives is that the employer should recognized the anticipate cost of providing persons on a systematic and rational basis over the period during which he derives benefit from the employee’s services. This statement specifies that many companies have until now, simply charged the contributions payable to the pension scheme as the pension cost in each accounting period.
2. The selection of actuarial method and assumption to be used in assessing the person cost of a defined benefit scheme is a matter of judgment for the actuary in consultation with his client, taking account of the circumstances of they specific company and its work force.
3. Where a stable contribution rate for regular contributions, expressed as a percentage of pension able earnings has been determined, that rate will provide an acceptable basis for calculating the regular cost understated accounting objectives so long as 9it make full provision for the expected benefit over though anticipated service lives of employees.