1. Statement of Standard Accounting Practice (‘accounting standards’) describe methods of accounting approved by the Council of The Institute of Chartered Accounts of Jamaica for application to all financial accounts intended to give a true and fair view of financial position and profit or loss.*

Disclosure of significant departures

2. Significant departures in financial accounts from applicable accounting standards should be disclosed and explained. The financial effect should be estimated and disclosed unless this would be impracticable or misleading in the context of giving a true and fair view. If the financial effects of departures from standard are not disclosed, the reason should be stated.

Obligation for chartered accountants to observe accounting standards or justify departures

3. The Council expects members of the Institute who assume responsibilities in respect of financial accounts to observe accounting standards. Where this responsibility is evidenced by the association of their names with such accounts in the capacity of directors or other officers the onus will be on them to ensure that the existence and purpose of standards are fully understood by non-member directors and other officers; and to use their best endeavours to ensure that standards are observed or, if they are not observed, that significant departures from them are disclosed and explained in the accounts and their effect, if material, disclosed. Where members act as auditors or reporting accountants the onus will be on them not only to ensure disclosure of significant departures but also, to the extent that their concurrence is stated or implied, to justify them. The Institute, through its Professional Practice Committee, may enquire into apparent failures by members of the Institute to observe accounting standards or to disclose departures therefrom. Any such failure may be the subject of disciplinary action.

The date from which members are expected to observe accounting standards will be declared in each Statement of Standard Accounting Practice.

5. Accounting standards are not intended to be a comprehensive code of rigid rules. It would be impracticable to establish a code sufficiently elaborate to cater for all business situations and circumstances and every exceptional or marginal case. Nor could any code of rules provide in advance for innovations in business and financial practice.

6. Moreover it must be recognised that there may be situations in which for justifiable reasons accounting standards are not strictly applicable because they are impracticable or, exceptionally, having regard to the circumstances, would be inappropriate or give a misleading view.

7. In such cases modified or alternative treatments must be adopted and, as noted, departure from standard disclosed and explained. In judging exceptional or borderline cases it will be important to have regard to the spirit of accounting standards as well as to their precise terms, and to bear in mind the overriding requirement to give a true and fair view.

8. Statements of Standard Accounting Practice are not intended to apply to accounts prepared and audited in overseas territories for local purposes where different requirements of law or generally accepted practice prevail, but are intended to be applied where accounts of overseas subsidiaries and associated companies are incorporated in Jamaican group accounts.