Thomas_Ch02-ConceptualFramework-clean.pptx

Thomas_Ch02-ConceptualFramework-clean.pptx - PREVIEW OF...

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2-1 PREVIEW OF CHAPTER 2 Intermediate Accounting 16th Edition Kieso ● Weygandt ● Warfield
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2-2 1 Describe the usefulness of a conceptual framework. 2 Understand the objective of financial reporting. 3 Identify the qualitative characteristics of accounting information. 4 Define the basic elements of financial statements. LEARNING OBJECTIVES 5 Describe the basic assumptions of accounting. 6 Explain the application of the basic principles of accounting. 7 Describe the impact that the cost constraint has on reporting accounting information. 8 Compare the conceptual frameworks underlying GAAP and IFRS. After studying this chapter, you should be able to: Conceptual Framework for Financial Reporting 2 LO 1
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2-3 The Need for a Conceptual Framework To develop a coherent set of standards and rules. To solve new and emerging practical problems. LO 1 Conceptual Framework
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2-4 The FASB has issued seven Statements of Financial Accounting Concepts (SFAC) for business enterprises. Development of Conceptual Framework Development of Conceptual Framework SFAC No.1 - Objectives of Financial Reporting (superseded by SFAC No. 8) SFAC No.2 - Qualitative Characteristics of Accounting Information (superseded by SFAC No. 8) SFAC No.3 - Elements of Financial Statements (superseded by SFAC No. 6) SFAC No.5 - Recognition and Measurement in Financial Statements. SFAC No.6 - Elements of Financial Statements (replaces SFAC No. 3). SFAC No.7 - Using Cash Flow Information and Present Value in Accounting Measurements. SFAC No.8 - The Objective of General Purpose Financial Reporting and Qualitative Characteristics of Useful Financial Information (replaces SFAC No. 1 and No. 2) LO 1
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2-5 First Level = Basic Objectives Second Level = Qualitative Characteristics and Elements Third Level = Recognition, Measurement, and Disclosure Concepts. LO 1 Overview of the Conceptual Framework Conceptual Framework
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2-6 LO 1 Illustration 2-7 Conceptual Framework for Financial Reporting
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2-7 1 Describe the usefulness of a conceptual framework. 2 Understand the objective of financial reporting. 3 Identify the qualitative characteristics of accounting information. 4 Define the basic elements of financial statements. LEARNING OBJECTIVES 5 Describe the basic assumptions of accounting. 6 Explain the application of the basic principles of accounting. 7 Describe the impact that the cost constraint has on reporting accounting information. 8 Compare the conceptual frameworks underlying GAAP and IFRS. After studying this chapter, you should be able to: Conceptual Framework for Financial Reporting 2 LO 2
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2-8 First Level: Basic Objectives First Level: Basic Objectives LO 2 Objective of financial reporting : To provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decisions about providing resources to the entity .
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2-9 1 Describe the usefulness of a conceptual framework.
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  • Spring '14
  • CurtisAtchley
  • Balance Sheet, Generally Accepted Accounting Principles, International Financial Reporting Standards

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