Geography 1100 Chapter Notes - Chapter 2: Accounts Payable, Retained Earnings, Financial Statement
Document Summary
Conceptual framework: developed for shareholders to have access to information. Shareholders purchase shares in a com[any ex coca cola and are given access to financial information to make decisions to continue to invest in that company. Shows us what to present in financial statements. The overall objective of financial reporting is to provide information that is: Resource allocation decisions are assumed to include assessment of management stewardship (management role in maximizing shareholder value)(management hired on behalf of shareholders) To be useful in decision making procsses we look at the following characteristics: Be able to tell you alot from financial statements. Be useful and free from bias(shouldn"t care what the outcome is) Substance over form (look at the substance over transaction over the legal form) (example: leases. ) 1)comparability- info measured and reported in similar ways (company to company, year to year) it allows users to identify real economics similarities and differences. 2)verifiability- similar results achieved if same methods are used.