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ACCT 351 (2)
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Department
Accounting
Course
ACCT 351
Professor
Karen Zajdman- Borden
Semester
Fall

Description
IntermediateFinancialAccountingNotesChapter2ConceptualFrameworkUnderlyingFinancialReportingConceptualFrameworkCoherentsystemofinterrelatedobjectivesandfundamentalsthatcanleastoconsistentstandardsandthatprescribesthenaturefunctionandlimitsoffinancialaccountingandfinancialstatementsRationaleforConceptualFrameworkAconceptualFrameworkisneededtoCreatestandardsthatbuildonanestablishedbodyofconceptsandobjectivesProvideaframeworkforsolvingnewandemergingpracticalproblemsIncreasefinancialstatementusersunderstandingofandconfidenceinfinancialreportingEnhancecomparabilityamongthefinancialstatementsofdifferentcompaniesDevelopmentoftheConceptualFrameworkLevel1ObjectivesAccountingsgoalsandpurposesLevel2QualitativeCharacteristicsofAccountingInformationMakeaccountinginformationusefulElementsofFinancialStatementsAssetsliabilitiesequityrevenuesexpensesgainsandlossesLevel3FoundationalPrinciplesUsedinestablishingandapplyingaccountingstandardsObjectiveofFinancialReportingObjectiveofFinancialReportingTocommunicateinformationthatisusefultoinvestorscreditorsandotherusersinmakingtheirresourceallocationdecisionsincludingassessingmanagementstewardshipabouttheeconomicresourcesandclaimsonthemaswellasthefinancialperformanceProvideinformationaboutthefinancialpositionchangesinfinancialpositionandtheentitysperformancethroughgeneralpurposefinancialstatementsbasicstatementsintendedtogiveinformationthatmeetstheneedsofkeyusersandprovidethemostusefulinformationpossibleinamannerwherebybenefitsexceedcostsQualitativeCharacteristicsofUsefulInformationChoosinganacceptableaccountingmethodtheamountandtypesofinformationtobedisclosedandtheformatinwhichinformationshouldbepresentedinvolvesdeterminingwhichalternativesgivesthemostusefulinformationfordecisionmakingpurposesFundamentalQualitativeCharacteristicsRelevanceToberelevantaccountinginformationmustbecapableofmakingadifferenceinadecisionRelevantinformationhelpsusersmakepredictionsaboutthefinaloutcomeofpastpresentandfutureeventsIthaspredictivevalueAlsohelpsusersconfirmorcorrecttheirpreviousexpectationsFeedbackconfirmatoryvalueRepresentationalFaithfulnessAccountinginformationisrepresentationallyfaithfultotheextentthatitreflectstheunderlyingeconomicsubstanceofaneventortransactionTransparencyInformationmustbeCompleteStatementsshouldincludeallinformationnecessarytoportraytheunderlyingeventsandtransactionsPertinentinformationmustbeincludedsinceitispossibletomisrepresentsomethingbynotincludingitNeutralInformationcannotbeselectedtofavoronesetofstakeholdersoveranotherInformationshouldbefactualtruthfulandunbiasedNeutralityinstandardsettingSomearguethatstandardsshouldnotbeissuediftheycauseundesirableeconomicconsequencesStandardsmustbefreefrombiassothatfinancialstatementsarecredibleStandardsettersmustchoosethebeststandardsregardlessofeconomicconsequences
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