BU127 Lecture Notes - Lecture 4: Current Liability, Faithful Representation, Current Asset
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BU127 Full Course Notes
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Lecture 3 chapter 2: the statement of financial position (balance sheet) Conceptual framework of the statement of financial position. Relevance: makes a difference in a decision, predictive value, Faithful representation: complete, neutral, reasonably free from error or bias o. Enhancing (degrees of usefulness): comparability, verifiability, timeliness, understandability. Timeliness: information must be available before it loses its usefulness reasonably informed users to see the significance of the information - elements to be measured and reported: o assets, liabilities, shareholders" equity, investments by owners, distribution to owners. Definitions featured in chapter 1 notes o revenues, expenses, gains and losses expenses: from day-to-day operations of a firm. Gains and losses: from one-time transactions of a firm: comprehensive income - concepts for measuring and reporting information: o assumptions: separate entity, stable monetary unit, continuity (going concern), periodicity. Separate entity: activities of the business are separate from the activities of owners.
