Fall Break Planning. Fall break is October 13 th & 14 th Second exam is scheduled for Wednesday October 15 th Review session will be Tuesday October 14 th at 7:30pm Alternative exam time (before fall break) will be Friday October 10 th from 8:00am to 9:20am.
FASB has developed the Financial Accounting Standards Board Codification Research System (CRS). CRS is an online real-time database that provides easy access to the Codification.
User Groups that Influence the Formulation of Accounting Standards
GAAP in a Political Environment
GAAP is as much a product of political action as they are of careful logic or empirical findings.
International Accounting Standards
Two sets of standards accepted for international use:
FASB and IASB recognize that global markets will best be served if only one set of GAAP is used.
US GAAP → IFRS
ABOUT THE NUMBERS
Accounting Today Article –
“Accounting Convergence Unachievable”
Q2-1 What is a conceptual framework? Why is a conceptual framework necessary in financial accounting?
The Conceptual Framework has been described as a constitution, a coherent system of interrelated objectives and fundamental that lead to consistent accounting standards.
Overview of the Conceptual Framework
LO 2 Describe the FASB’s efforts to construct a conceptual framework.
Objective of general-purpose financial reporting is:
To provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decisions about providing resources to the entity.
“The FASB identified the Qualitative Characteristics of accounting information that distinguish better (more useful) information from inferior (less useful) information for decision-making purposes.”
Hierarchy of Accounting Qualities
LO 4 Identify the qualitative characteristics of accounting information.
Q2-3 What is mean by the term “qualitative characteristics of accounting information”?
To be relevant, accounting information must be capable of making a difference in a decision.
Q2-5 How is materiality (or immateriality) related to the proper presentation of financial statements? What factors and measures should be considered in assessing the materiality of a misstatement in the presentation of a financial statement?
Fundamental Quality—Faithful Representation
Faithful representation means that the numbers and descriptions match what really existed or happened.
In Accounting, Truth Above All