Management and Organizational Studies 1023A/B Lecture Notes - Lecture 2: Financial Statement, Sobeys, Resource Allocation

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Barry Hawn

Document Summary

Usefulness of a conceptual framework: the framework is like a constitution; it is a coherent system of interrelated objectives , aids in creation of standards for the accounting profession. Increases financial statement users" understanding of and confidence in financial reporting: enhances comparability of financial statements of different companies. Objectives of the conceptual framework: the framework is the foundation for building a set of accounting concepts and objectives, the framework is a reference of basic accounting theory for solving new and emerging practical problems of reporting. Trueblood committee (1970"s: the overall objective of financial reporting is to provide information that is, useful to users (ex. Investors, creditors), and: decision relevant (resource allocation, resource allocation decisions are assumed to include assessment of management stewardship (ie. management role in maximizing shareholder value) Loan from bank, pay supplier, take supplies, pay back loan: 2. Lease supplies from supplier, use supplies, return after set legal time of use.