Cash accounting system according to IAS/IFRS

Paola Saracino, Milan Bicocca University

Abstract

Nowadays enterprise accounting informative systems are not able to offer a complete bookkeeping system in order to comply with Ias 7 and Ias 36 requirements, therefore an adequate information system is required.

In fact, both the Italian and the Anglo-Saxon accounting systems through their integrated accounting recordings cannot represent an adequate support for cash accounting. The aim is to measure income and capital. These are only two of the three main criteria used for enterprise performance evaluation: so there is no evidence of any cash inflow and outflow records in the accounting system.

Nowadays, international accounting standards view cash flow as a measure for business performance (both for entities and business units), but enterprises do not have a cash accounting system integrated with financial and management dimensions.

An integrated accounting system is necessary to record cash accounting both for cash flow statements and cash generating units.