conceptual frameworks

Question 1

The fundamental qualitative characteristics of useful financial information

Answer 1

The fundamental qualitative characteristics of useful financial information are relevance and faithful representation.
Comparability is an enhancing qualitative characteristic. Materiality is a component of relevance, in addition to predictive value and confirming value.
Understandability and timeliness are enhancing qualitative characteristics of useful financial information.
Verifiability is an enhancing qualitative characteristic. Neutrality is a component of faithful representation.

Question 2

Gain contingencies

Answer 2

Gain contingencies should not be recognized prior to realization as a prudent reaction to the uncertainty surrounding the realization of the gain as reflected in the convention of conservatism.

Question 3

faithful representation and relevance

Answer 3

Completeness is an ingredient of faithful representation. Other ingredients of faithful representation include neutrality and freedom from error. The ingredients of Completeness is an ingredient of faithful representation. Other ingredients of faithful representation include neutrality and freedom from error. The ingredients of relevance are predictive value, confirming value, and materiality.

Question 4

Revenues and gains are realized

Answer 4

when assets are exchanged for cash or claims to cash. SFAC 5 para. 83.

Question 5

enhancing qualitative characteristics

Answer 5

Timeliness, understandability, comparability and verifiability are characteristics that enhance the usefulness of information that is relevant and faithfully represented

Question 6

elements of present value measurement

Answer 6

U
The Price for Bearing Uncertainty.
V
Expectations about Timing Variations of Future Cash Flows.
O
Other Factors (e.g., Liquidity Issues and Market Imperfections).
T
Time Value of Money (the Risk-free Rate of Interest).
E
Estimate of Future Cash Flow.

Question 7

the fundamental qualitative characteristics of useful financial information.

Answer 7

Relevance and faithful representation

Question 8

enhancing qualitative characteristics of useful financial information.

Answer 8

Timeliness, understandability, comparability and verifiability are characteristics that enhance the usefulness of information that is relevant and faithfully represented

Question 9

realization concept

Answer 9

Revenues and gains are realized when assets are exchanged for cash or claims to cash. SFAC 5 para. 83.

Question 10

A change in method of accounting

Answer 10

then a change in accounting principle is considered inseparable from a change in estimate, the change is handled as a change in estimate - prospectively. No cumulative effect adjustment is made. Thus, the effect is reported prospectively as a component of income from continuing operations.