BUS 201 Lecture Notes - Lecture 1: International Accounting Standards Board, International Financial Reporting Standards, Financial Statement

• School: USF
• Department: Business Administration
• Course: BUS 201
• Professor: Kathryn Troxel

Document Summary

Lecture 1: (gaap): generally accepted accounting principles: formulated by (fasb) financial accounting standards board (ifrs): international financial reporting standards, formulated by (iasb) international accounting standards board. Accounting objective: financial reporting on an entity (business) for potential investors, lenders and creditors in making decisions about providing resources to the entity. Fundamental qualitative characteristics: relevance and faithful representation. Enhancing qualitative characteristics: comparability, verifiability, timeliness, understandability. Entity assumption: an org. stands apart from other orgs and individuals as a separate economic unit. Continuity assumption: entity will continue to operate for the foreseeable future i. e. a fou(cid:374)de(cid:396) (cid:272)a(cid:374) (cid:271)e fi(cid:396)ed f(cid:396)o(cid:373) the (cid:271)oa(cid:396)d of thei(cid:396) o(cid:449)(cid:374) (cid:272)o(cid:373)pa(cid:374)y a(cid:374)d it"ll keep (cid:396)u(cid:374)(cid:374)i(cid:374)g a(cid:374)d they"ll (cid:271)e (cid:396)epla(cid:272)ed. Historical cost principle: assets should be recorded at their actual cost on date of purchase i. e. g(cid:396)a(cid:374)d(cid:373)a (cid:271)uys house fo(cid:396) (cid:1004)(cid:1004)k i(cid:374) sf (cid:894)it"s sepa(cid:396)ate f(cid:396)o(cid:373) the (cid:396)ealto(cid:396) (cid:448)alue(cid:895) Stable monetary unit assumption: assume dollar purchasing power is stable over time: assets = lia(cid:271)ilities + sto(cid:272)kholde(cid:396)"s e(cid:395)uity.