The Accounting Plan
1) The Evolution of the Acounting Plan
In 1937 in Germany, a National committee established an accounting plan for the industrial sector; this plan came out as a result of a doctrine initiated since 1918. The German accounting plan was made up of ten classes, numbered from 0 to 9 and used a decimal codification.
IN 1947, after the second world war, the French government was inspired by the German accounting plan, and came out with what was known as the 1947 french accounting Plan; the mam aim of this plan was to enable all the business units to speak the same language.
This plan was also exported to all French colonies. It consisted of a list of accounts without elaborating on the principles and methods, but the positive aspects of this plan were the following:
- General accounting was clearly separated from cost accounting.
- There was a list of accounts, divided into classes numbered from 1 -8 for general accounting class 9 was reserved tor cost accounting.
- There were three financial statements namely the balance sheet, the operating account, and the profit or loss account.
In 1957, the 1947 french accounting plan was updated, the main innovation of this plan was in cost accounting. The new plan elaborated on costing methods and forecasting management.
In 1968, in Niamey (NIGER) the UDEAC countries initiated an accounting plan. In 1970, the heads of the States of OCAM organization met in Yaounde (Cameroon) and adopted the OCAM accounting plan initiated in Niamey. This OCAM plan inspired the Ivory Coast Accounting Plan, Belgium, Spanish, Portuguese accounting plans and also the 1982 French accounting plan.
In 1982 in France, the 1957 plan was replaced by the 1982 plan, which became applicable as from 1984. On the 17/10/1993 in Port Louis (Mauritania), the Harmonisation of Business Law in Africa, known as OHADA in french acronym was ratified by 16 member States. Article 2 of this treaty outlines the subjects which belong to the scope of business law. They are Companies Law, the legal status of businessmen, Labour Law, Accounting Law, etc.
In December 1995, there was a project for the harmonization of accounting law The OHADA accounting system is attached to the uniform act relating to accounting. the law adopted in 2000. In 2001, the OHADA accounting system was to be fully implemented for personal accounts of the enterprise. In 2002, the OHADA accounting system was to be implemented for consolidated and combined accounts.
2) Definition of the Accounting Plan
The accounting plan is a set of rules and modalities which enable someone to perform accounting tasks. It follows that each business has its accounting plan which derives from the general accounting plan. There are also sectorial accounting plans which regulate the activities of the firm in the sector e,g Banking sector, Hotels, Insurance, etc.
The accounting plan of a business is the list of accounts classified in a given Indeed, an accounting system can only function if a previously established list of account to be used has been drawn up, based on general economic considerations which are specific to the business.
3) THE OHADA ACCOUNTING SYSTEM: The OHADA accounting system is derived from the OHADA accounting law which was ratified in 2000. This accounting system has been inspired by other accounting plans and especially by the IAS (International Accounting Standards) to stand the task of globalization.
4) THE CONTENT OF THE OHADA ACCOUNTING SYSTEM: In compliance with the IAS, the OHADA accounting system proposes a framework for accounting bookkeeping. It is an important document which contains the following points:
- The list of accounts,
- The functioning of the accounts,
- The personal financial statements,
- Consolidation accounts and financial statements,
- The specific transactions and problems,
- The terminology,
- The nomenclature,
- The minimum cash system.
3) General Frame Work
It deals with accounting bookkeeping and the terminology.
- ACCOUNTING BOOKKEEPING.
The OHADA accounting system has laid emphasis on some principles, which are:
-The general principles.
-The organizational principles.
- Bookkeeping and the accounts.
4) Policy UNIFORMITY
The coherent accounting information over successive financial years is geared towards the permanent application of rules and procedures.
THE HISTORICAL COST: Goods acquired are recorded at their origin cost, those received freely are recorded at their market price, goods produced for own use are recorded at their cost of production.
- NON- COMPENSATION: there should not be any compensation among assets accounts and liabilities accounts nor among revenues and expenditure accounts.
- THE CONTINUITY OF OPERATIONS: the business is assumed to continue opera!.ons during the presentation of its financial statements.
- INDEPENDENT FINANCIAL YEARS: financial statements of the years should take into account the operations of the year only.
5) About the Standardization.
The OHADA accounting system has been inspired by some accounting standards, especially those defined by the IASC (International Accounting Standard Committee) and ISAP (Institute of Standard Accounting Practice).
6) About Book Keeping and Accounts.
It is concerned with the accounting systems and the constraints of computerized accounting.
- The terminology: The OHADA accounting system has proposed terminology that should be used in accounting. This terminology is the standard definition (vocabulary) of the terms which are used in accounting. Those terms cannot be reproduced here but the present textbook respects the proper use of those words in the topics.
- Practical framework: The OHADA accounting system has proposed the following: the type, the layout and the content of the financial statements to be established at the end of the financial year. the accounting plan(or list of accounts)that should be used by business units. Explanation about the functioning of the accounts and the valuation methods.
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