Textbook Notes (368,831)
Canada (162,194)
Accounting (533)
ACC 703 (19)
Chapter 1

Chapter 1 notes for ACC703

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Department
Accounting
Course
ACC 703
Professor
Donna Zathy
Semester
Winter

Description
Modern Advanced Accounting 3 Major Accounting Topics 1 Consolidations 2 Foreign currency transactions and operations 3 Notforprofit and government organizationsObjectives of Reporting y Financial accounting providing financial information to present and potential capital providers such as investors and creditors Want to invest with highest return and lowest risk y Investors usually want GAAP followed reports because this ensures that they are understandable comparable and reliable y Late 2009 CICA approved a completely new set of GAAP for private enterprises which willbe contained in Part II of the CICA Handbook Section 1000 Financial Statement Conceptsy 2011 Private enterprises can opt to follow GAAP for public companies ie IFRS or GAAP for private enterprises Method adopted must be followed as a whole packageA private enterprise can adopt part II of the Handbook early starting with its 2009 financial statements Framework for the Preparation and Presentation of Financial Statements component of the Handbook y Describes the concepts underlying the accounting principles used in generalpurpose financial statements y Main items included in this section includes 1 The objective of financial statements 2 Underlying assumptions 3 Qualitative characteristics of financial statements 4 The recognition and measure of the elements of financial statements 5 Concepts of capital and capital maintenanceProfessional Judgment y The ability to make decisions for issues encountered by professionals in carrying out their daytoday responsibilitiesy In the preparation of financial statements there are 3 main areas where decisions the use of professional judgment must be made 1 Accounting policies such as when to recognize revenue how to report an interest in a joint venture and whether or not to consolidate a specialpurpose entity involve making a decision after considering various methods2 Making accounting estimates of many kindsEstimated useful life or PPERecoverable amount for GWWill a forward contract be effective as a hedge of expected sales for the next three years 3 What to disclose and how to disclose it in the notes to the fs Disclosing a contingent liability resulting from a lawsuit the company could simply say that it has been sued but no provision is made in the fs because it feels that the lawsuit has no meritOR it could provide details of the lawsuit and give some probabilities of different outcomes
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