Conceptual Framework

Conceptual Framework - CONCEPTUAL FRAMEWORK OF GAAP...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
CONCEPTUAL FRAMEWORK OF GAAP Financial Accounting -Relevant financial information is provided primarily through financial statements and related disclosure notes primarily for external use. Required per GAAP: 1 Income Statement 2 Statement of Comprehensive Income 3 Statement of Shareholders’ Equity 4 Balance Sheet 5 Statement of Cash Flows And Footnotes . Cash Versus Accrual Accounting Cash Basis Accounting Revenue is recognized when cash is received. Expenses are recognized when cash is paid. Accrual Basis Accounting uses the Revenue Recognition and Matching Principles in the Conceptual Framework-Required by GAAP Hierarchy of GAAP (in order of most to least authoritative) 1. FASB Statements of Financial Accounting Standards, FASB Interpretations, SEC rules and interpretive releases, AICPA Accounting Research Bulletins, Accounting Principles Board Opinions 2. FASB Technical Bulletins, AICPA Industry Audit and Accounting Guides and Statements of Position 3. AICPA Accounting Standards Executive Committee Practice Bulletins 4. FASB Implementation Guides, AICPA Accounting Interpretations, AICPA Industry Audit and Accounting Guides and Statements of Position, and widely recognized general or industry practices. The Development of Financial Accounting and Reporting Standards 1934 – present Securities and Exchange Commission Evolution of Standard-Setting Process 1938 – 1959: Committee on Accounting Procedures (CAP) 1959 – 1973:Accounting Principles Board (APB) 1973-Present: Current Standard Setting - FASB www.fasb.org Supported by the Financial Accounting Foundation. Seven full-time, independent voting members serving for 10 years. Answerable only to the Financial Accounting Foundation. Members not required to be CPAs. Establishment of Accounting Standards A Political Process FASB’s Standard-Setting Process Identification of problem. The task force.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Research and analysis. Discussion memorandum.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

Conceptual Framework - CONCEPTUAL FRAMEWORK OF GAAP...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online