Acco 310 - Chapter 2 Handout

Acco 310 - Chapter 2 Handout - Prof.: Mervat Saleh, CA...

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Unformatted text preview: Prof.: Mervat Saleh, CA Chagter 2 Conceptual Framework Underlying Financial Reporting I - Concegtual Framework: ll - Fundamental Qualitative Characteristics: 1. Relevance 2. Representational Faithfulness 3. Comparability 4. Verifiability 5. Timeliness 6. Understandability ||I - Foundational Principles: A - Recognition / Derecognition a. Elements of financial statements have been recognized when: 1. Economic Entity 2. Control 2. Revenue recognition and realization — Revenue is recognized when: i. Risks and rewards ii. Measurability iii. Collectability 3. Matching Prof.: Mervat Saleh, CA B - Measurement - Estimate must 5. Periodicity 6. Monetary unit 7. Going concern 8. Historical cost 0 Three basic assumptions of historical cost: 9. Fair value - IFRS allows the use of fair value measurement in more situations than private entity GAAP C - Presentation and Disclosure 10. Full disclosure . Disclosure may be made: 1. Within the F/S 2. Notes 3. Management Discussion and Analysis (MD&A) - Five key elements that should be included: 1. Company’s business strategy 2. Key performance drivers 3. Capital and other resources 4. Historical and prospective results 5. Any risks Prof.: Mervat Saleh, CA N - Elements of Financial Statements: Assets Liabilities Equity Revenues Expenses Gains Losses O'OOOOOO ...
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Acco 310 - Chapter 2 Handout - Prof.: Mervat Saleh, CA...

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