ADMS 3585 Chapter Notes - Chapter 2: Accounts Payable, Livent, Cash Flow
19 Oct 2012
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Document Summary
Why conceptual framework: practical (in real world, providing ground rules. To resolve real-world accounting issues: not override current gaap. Educational (for students: to provide a framework to analyze accounting issues in financial reporting, case analysis: e. g. ca2-1 (p. 85) Acsb, iasb and fasb have their own individual framework. These frameworks differ in various respects, are incomplete, and are not up to date. Level 1: objectives of financial reporting (iasb and fasb exposure draft) the objective is to communicate information that is useful to users in making their resource allocation decisions . Provide useful information to users in decision making. Level 2: qualitative characteristics and elements: qualitative characteristics, to assess quality of financial reporting (high quality vs. low quality) Elements: to establish language that is common to users and preparers of financial reports. Fundamental qualitative characteristics: relevance, makes a difference in a decision, has predictive and feedback/confirmatory value, representational faithfulness.
