Financial Reporting Concepts

Financial Reporting Concepts - Financial Reporting Concepts...

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Financial Reporting Concepts It would be unwise to make business decisions based on financial statements without understanding the implications of these concepts. The Standard-Setting Environment How does Best Buy decide on the type of financial information to disclose? What format should it use? How should it measure assets, liabilities, revenues, and expenses? The answers are found in a set of rules and practices having substantial authoritative support, referred to as generally accepted accounting principles (GAAP) . Various standard-setting bodies, in consultation with the accounting profession and the business community, determine these guidelines: The Securities and Exchange Commission (SEC) oversees U.S. financial markets and accounting standard-setting The Public Company Accounting Oversight Board (PCAOB) and reviews auditing firms. The Financial Accounting Standards Board (FASB) body in the United States. The International Accounting Standards Board (IASB) adopted by many countries outside of the United States. International Note Over 100 countries use international standards (called IFRS). For example, all companies in the European Union follow international standards. The differences between U.S. and international standards are not generally significant. In this book, we highlight any major differences using International Notes like this one. The FASB and IASB have worked closely to try to minimize the differences in their standards.
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Financial Reporting Concepts - Financial Reporting Concepts...

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