ACC Standards Flashcards
SEC
has legal authority to establish GAAP
FASB ASC Codification
single source of authoritative
FASB
full time organization that determines GAAP
IASB purpose
develop single set of high quality global accounting standards
Conceptual Framework
basic reasoning
Primary users of financial statements
existing and potential investors lenders and creditors
Fundamental Qualitative Characteristics
Relevance and Faithful Representation
Relevance
“Passing Confirms Money”
predictive Value
Confirming Value
Materiality
Faithful Representation
“Completely Neutral is free from error”
Completeness
Neutrality
Free from Error
Enhancing Qualitative Characteristics
“Compare and verify in time to understand”
Comparability
Verifiability
Timelineness
Understandability
Cost Constraint
Benefit > Cost
Full set of Financial Statements
statement of financial position ( balance sheet )
statement of earnings ( income statement )
statement of comprehensive income
statement of cash flows
statement of changes in owners equity
PPE measured at
historical cost
Inventory measured at
current cost
A/R measured at
NRV
Stocks measured at
( Current) Market Value
Bonds ( LT Debt) measured at
PV of future cash flows
SFAC No. 6 Elements
REGL ALE needs ID
Comprehensive Income Revenues Expenses Gains Losses
Assets
Liabilities
Equity
Investments by Owners
Distributions by Owners
Five elements of PV measurement (SFAC No. 7)
Estimate of Future cash flow expectations about timing variances TVM Price for bearing uncertainty Other factors
