Chapter_2 - Chapter 2 Conceptual Framework Development The...

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Chapter 2 Conceptual Framework Development The FASB has issued seven Statements of Financial Accounting Concepts (SFAC) for business enterprises. SFAC No.1 - Objectives of Financial Reporting. SFAC No.2 - Qualitative Characteristics of Accounting Information. SFAC No.3 - Elements of Financial Statements. 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) <helpful diagram! Really important to understand!> First we have the BASIC OBJECTIVES Objective of general-purpose financial reporting is: 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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