COMM 217 Lecture Notes - Lecture 2: European Canadian, Accounts Receivable, Bookkeeping

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Chapter 2 investing and financial decisions and the statement of financial position. Principal: an entity"s ability to pay interest on a loan over time and repay the initial amount borrowed. Constraints of accounting measurement (tensions: cost constraint: cost vs. benefit of some information, prudence: faithful representation vs. conservatism (need to show the true risk exposure) Measurement concepts: mixed-attribute measurement model, 2 ways of measuring things, e(cid:454): inventor(cid:455) lcm, historical cost accounting, cost paid to acquire asset, fair value accounting (ifrs 13, models, inputs, estimates. Property can also be listed as "capital asset" Goodwill is only recognized when corporation will acquire a subsidiary: ex: brand image. People pay more for companies with strong brand. Consolidated: the classified elements of canadian tire"s statement of financial position are combined with those of other companies under its control. Current assets (short term): cash, short-term investments, accounts receivable, prepaid expenses, other current assets. Non-current assets (long term): property and equipment, financial assets, goodwill, other assets.

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