Preparation of accounting policies

Every business should develop and put in writing the accounting policies, including accounting rules, that are most appropriate to the business’s circumstances.

The accounting policy should include the following:

1. policies for the inventory of assets and liabilities

2. policies for the valuation of assets and liabilities

3. internal rules on the system of cost accounting

4. the scrapping policy

5. the cash management policy

6. Chart of accounts

7. Rules on supporting documents

An accounting policy must be established and written down on the basis of the principles and valuation procedures laid down in the Accounting Act, which shall determine the means and methods of implementing the Act and shall be most appropriate to the enterprise’s characteristics and specific features. The accounting policy is the principal accounting rule for the enterprise concerned since the rules it lays down are binding on the enterprise and may be departed from only by amending the accounting policy in the manner prescribed by the Accounting Act, after the adoption of the amended rules and in the manner prescribed therein.