ACCTG 101 Lecture Notes - Lecture 13: Faithful Representation, Accrual, Income Statement
Document Summary
Rental agreements in which lessee pays lessor use of property rent. When risks/benefits incidental to ownership transfer to lessee. Dr finance lease asset, dr finance lease obligations liability. Liability reduced as payments made on lease. Principal deducted from liability, interest as expenses. If nor the economic equivalent of ownership. E. g. if rental where owner continues repairs/maintenance, controls asset and regains use after x period. Period it is depreciated and straight line/reducing balance. Recognition based on probability of service potential;/future eco benefit eventuates/cost measured reliably. Items generally valued by gov departments at cost/written down replacement value. Financial reporting principles, accounting standards and auditing and sustainability. Combination of authoritative standards and concept statements issued by standard setters (aus acct standards board) Statements of accounting concepts developed: definition of reporting entity, objective of general purpose financial reporting. Non-current: qualitative characteristics of financial info, definition and recognition of the elements of financial statements. Framework for the preparation and presentation of financial statements.
