My Chapter 2 Lecture Slides

My Chapter 2 Lecture Slides - ConceptualFramework Why do we...

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Conceptual Framework Why do we need a conceptual framework? 1. Build on and relate to an established body of concepts and objectives 2. Provide a framework for solving new problems 3. Increase financial statement users’ understanding and confidence in financial  reporting 4. Enhance comparability among companies’ financial statements
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ASSUMPTIONS ASSUMPTIONS 1. 1. Economic entity Economic entity 2. 2. Going concern Going concern 3. 3. Monetary unit Monetary unit 4. 4. Periodicity Periodicity PRINCIPLES PRINCIPLES 1. 1. Measurement Measurement 2. 2. Revenue recognition Revenue recognition 3. 3. Expense recognition Expense recognition 4. 4. Full disclosure Full disclosure CONSTRAINTS CONSTRAINTS 1. 1. Cost-benefit Cost-benefit 2. 2. Materiality Materiality 3. 3. Industry practice Industry practice 4. 4. Conservatism Conservatism OBJECTIVES OBJECTIVES 1. 1. Useful in investment Useful in investment and credit decisions and credit decisions 2. 2. Useful in assessing Useful in assessing future cash flows future cash flows 3. About enterprise 3. About enterprise resources, claims to resources, claims to resources, and resources, and changes in them changes in them ELEMENTS ELEMENTS Assets, Liabilities, and Equity Assets, Liabilities, and Equity
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My Chapter 2 Lecture Slides - ConceptualFramework Why do we...

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