Accounting Standards for Business Enterprises and Accounting Standards for Small Enterprises are two different accounting systems, and there are some differences in their scope of application, account setting, statement preparation, etc. The choice of accounting standard depends mainly on the size and complexity of the business. This article will detail the differences between these two accounting standards and how to choose one.
1. Accounting Standards for Business Enterprises.
Accounting standards for business enterprises are applicable to listed companies, large and medium-sized enterprises and other enterprises with complex businesses. The standard includes basic standards and specific standards, where the basic standards are the basis of the accounting work of enterprises, and the specific standards are the specifications for specific businesses. The accounting standards for business enterprises are relatively comprehensive in the subject setting, and the preparation of financial statements is also relatively complex, which can reflect the financial status and operating results of the enterprise.
2. Accounting Standards for Small Enterprises.
Small Business Accounting Standards apply to small businesses where their business is relatively simple and their accounting treatment is relatively simple. The standard only includes basic guidelines and some specific guidelines, and the subject setting is relatively simple, and the preparation of reports is relatively simple. The purpose of the Small Business Accounting Standards is to meet the actual needs of small businesses and simplify the accounting process.
3. Considerations for choosing accounting standards.
Business size: The size of the business is an important factor in choosing an accounting standard. For larger enterprises, the use of Accounting Standards for Business Enterprises is more appropriate due to the complexity of their business and the need to use a more comprehensive and complex accounting system. Whereas, for smaller enterprises, whose business is simple and the accounting treatment is relatively simple, it is more suitable to use the small business accounting standards.
Business type: Different business types require different accounting systems. For example, for manufacturing enterprises, because their production processes and costing are more complex, they need to use more detailed accounting accounts and reports, so it is more suitable to use business accounting standards. Whereas, for commercial enterprises, their business is relatively simple and their accounting treatment is relatively simple, so it is more suitable to use small business accounting standards.
Purpose of use of statements: Different accounting systems are required for different purposes of use of statements. For example, for enterprises that need to borrow from banks, it is more appropriate to use business accounting standards because banks need to understand the financial status and operating results of the enterprises, and need to use more detailed and complex accounting statements. For enterprises that do not need to borrow from banks, the purpose of using their statements is relatively simple, so it is more suitable to use the small business accounting standards.
Training and management costs: Using different accounting systems requires different training and management costs. For smaller businesses, the use of small business accounting standards is more appropriate due to their smaller staff, which may have lower training and management costs. For larger enterprises, it is more suitable to use the Accounting Standards for Business Enterprises due to their larger staff, training and management costs may be higher.
Fourth, summary. Accounting Standards for Business Enterprises and Accounting Standards for Small Enterprises are two different accounting systems, and there are some differences in their scope of application, account setting, statement preparation, etc. The choice of accounting standard depends mainly on the size and complexity of the business. For larger enterprises, it is more suitable to use business accounting standards due to the complexity of their business and the need to use a more comprehensive and complex accounting system. For smaller businesses, where the business is simple and the accounting treatment is relatively simple, it is more suitable to use the small business accounting standards. When choosing, you should consider comprehensively according to the actual situation and choose the most suitable accounting system for yourself.