33:010:325 Lecture Notes - Lecture 2: Comprehensive Income, Deferral, Unobservable
13 Oct 2017
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Conceptual framework = theories that underlie accounting standards & guide standard setters: the underlying philosophy; doesn"t really take the place of accounting standards (the standards take into account the framework) Standard setters consider objectives, qualitative characteristics, elements of nancial statements, & costs/bene ts of new standards: understanding costs/bene ts is a costly and time-consuming process fasb creates standards & companies may/may not be affected by them. Objectives of nancial reporting = understanding qualitative elements with quantitative elements; framework ties all elements of accounting together to make a coherent body. Primary users = individuals who can"t get info. on demand (ie: investors, lenders, creditors: users are dependent on corporations to put out reliable nancial info. Objective of nancial reporting: qualitative characteristics: Fundamental characteristics: relevance & faithful representation: relevance = must be able to use info. to predict things; can be con rmed; must be material (something of note; large enough to in uence an end user)
