FAR 1 - Standard Setting, Income Statement, and Reporting Requirements

Question 1

SEC - has legal authority to establish GAAP

Committee on Accounting Procedure (CAP)
• 1939 - 1959 Accounting Research Bulletins

Accounting Priniples Board (APB)
• 1959 - 1973 Accounting Principle Boad Opinions

Financial Accounting Standards Board
• 1973 - Present

FASB Accounting Standards Codification
• Single source of nongovernmental U.S. GAAP
• July, 2009

Question 2

Qualitative Characteristics

Relevance
• Predictive Value - used to predict future outcomes
• Confirming Value - provides feedback about previous
outcomes
• Materiality - material if it would effect users decision

Faithful Representation (Reliable)
• Completeness
• Neutrality
• Freedom From Error