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The Application
Guidance for each NASCO developed by the project will be posted
on this website. Application Guidance refers to the materials
accompanying each NASCO that provides audit and accounting
practitioners with the detailed knowledge required to apply
the relevant standard satisfactorily. These materials consist
of:
Explanations and Recommendations: a detailed commentary
of each standard elaborating on the main principles involved
and providing simple practical examples of how the standard
should be translated into accounting entries;
Tax Bridge: a detailed analysis, with worked examples,
of how the relevant standard demands a different treatment
from that required by the Tax Code;
Conversion Methodology: a five-stage process of conversion
from the current accounting system to the NASCO framework,
envisaged as follows:
1. Correction of legacy account balances in line with NASCO;
2. Reclassification of balance sheet accounts in accordance
with the new chart of accounts;
3. Preparation of the opening balance sheet under NASCO;
4. Accounting for the first full year under NASCO rules;
5. Reconciling first year accounting profit according to
NASCO rules with taxable profit according to the Tax Code.
NASCO Application Guidance will appear here in due course
and be supplemented by a FAQ section addressing questions
that frequently arise in enterprises introducing NASCO.
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