2 - Objectives of Financial Reporting The FASB has... Ch. 2 - What is the period-of-time assumption, and why is... Ch. Distinguish between operating mergers and financial mergers. Journalize the December 31 adjusting... Should organizations fear websites where consumers post negative messages about products and services? 3. 2 - Identify the enhancing characteristics of useful... Ch. The main intent of the conceptual framework of the FASB is to establish objectives and fundamental concepts so as to help in development of the financial accounting and their reporting guidance. It is responsible for establishing Generally Accepted Accounting Principles (GAAP), which acts as a guide at the time of preparation of financial statements by enterprises. 2 - A company purchased a patent 4 years ago, and was... Ch. The framework provides the Board with both a basis for setting standards and a set of concepts to use as tools to resolve any accounting and reporting questions that may arise. The Financial Accounting Standards Board’s (FASB) conceptual framework is an important force in shaping the nature of U.S. generally accepted accounting principles (GAAP). 2 - The valuation of a promise to receive cash in the... Ch. Financial Accounting Standards Board (FASB): The Financial Accounting standards Board (FASB) is the primary standard-setting body in the Country U. When should... Ch. Moreover, there are several important conceptual themes that are implicit at the level of individual Standards yet that are (largely) absent from the Framework. 2 - What is the reporting entity assumption? 2 - An accountant must be familiar with the concepts... Ch. 8, Conceptual Framework for Financial Reporting, establishes the concepts that underlie financial reporting standards. Consider a broom factory that permanently closes because of foreign competition. Briefly define each function. 2 - What are the two primary qualities of useful... Ch. Why Does the FASB Have a Conceptual Framework? B.depreciated equipment was sold in exchange for a not receivable. How does economic growth influence the living standards of people? If a discovery of the remarkable health benefits of hot dogs were ... (Consumer Surplus) If, toward the end of the day, some people become indifferent whether or not they go on anot... Based on the information in this section, would you choose accounting as a career? 2 - What is the Objective: Useful Information for... Ch. The price of a good rises from 8 to 12, and the quantity demanded falls from 110 to 90 units. 2 - What is the Objective: Useful Information about... Ch. The Conceptual Framework had been left largely unchanged since its inception in 1989. 2 - Accruing net losses on obsolete inventory is an... Ch. It establishes definitions that are precise to help in discussing accounting issues. It achieved notable positive results, yet it isn’t without flaws. The framework provides the FASB with a foundation for setting standards and concepts to use as tools … 2 - What is faithfully represented accounting... Ch. The companys website enable... What is the natural rate of unemployment? The Financial Accounting Standards Board (FASB) has been criticized for not requiring firms to report information that is interpretable and useful for financial statements users (CICA, 1980). The objectives identify the goals and purposes of financial reporting and the fundamentals are the underlying concepts that help achieve those objectives. The FASB’s goal remains improving the quality of financial reporting in the U.S. while advancing global comparability of financial reporting. Conversely, a meaningful price floor must be ... Construct a production possibilities curve for a hypothetical country. She believes she can earn 10% on average each year on her ... Insert semicolons, colons, and commas where needed, and delete them where they are unnecessary. Ch. 2 - Conceptual Framework The FASBs Conceptual... Ch. (International Trade) Why does international trade occur? According to the FASB, the Conceptual Framework – or Concepts Statements – is comprised of interrelated objectives and fundamentals. Ch. Suppose there is an external cost, or negative externality, associated with production of a certain good. 2 - What is relevant accounting information? FASB has a list of topics they want to address 2. 2 - What is the going-concern assumption, and why is... Ch. 2 - Violations of Assumptions and Principles The... Ch. The Income Statement columns of the work sheet of Dunn Company for the fiscal year ended June 30 follow. 2 - List the reasons why external stakeholders use... Ch. The main intent of the conceptual framework of the FASB is to establish objectives and fundamental concepts so as to help in development of the financial accounting and their reporting guidance. revenues of an entity are usually measured by the exchange values of the asset or liability involved. The framework provides the FASB with a foundation for setting standards and concepts to use as tools … 2 - What are the primary sources of useful information... Ch. Analysis of costs for a shipping department Sales volume has been dropping at Mumford Industries. FASB staff look at the issue and figure out what needs to be addressed; the FASB issues a document and asks for input on that topic from the public (discussion paper, preliminary view paper, comments) 2 - A friend, who is not an accounting major, is... Ch. 2 - Compare and contrast comparability and... Ch. 2 - What is the cost constraint, and how does it... Ch. With a conceptual framework, they will be able to solve out-of-the-ordinary accounting problems. One of the most important reasons to develop a conceptual framework is to be able to develop rules based on an established body of concepts. Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts! 2 - Why does financial reporting utilize a mixed set... Ch. An economy produces hot dogs and hamburgers. c. A coherent set of accounting standards and rules should result. recognition of revenue does not occur until. How does... Ch. 2 - What is materiality, and how does it relate to... Ch. +�!�8�~k���%�p�,dT��YI/�W\�4� The main reasons for developing an agreed conceptual framework are that it provides a framework for setting accounting standards, a basis for resolving accounting disputes, fundamental principles which then do not have to be repeated in accounting standards. Practical problems should be more quickly solvable by reference to an existing Conceptual Framework. This project was undertaken because the Board believes that their standards must be based on ‘‘consistent principles.’’ FASB does not allow revaluations, except for some financial instruments that need to be carried out at fair value. Consider whether the proposed standard possesses the qualitative characteristics that make accounting information useful. Q ��d9��)E�x����W�-|*��"=�Z����Df��/%-��DZr����Y\�t=�C)��. Purpose The purpose of this essay is to present the IASB and FASB joint conceptual framework project and to consider and evaluate its objectives. Concepts Statement 2 emphasizes that providing comparable information enables users of financial statements to identify similarities in and differences between two sets of economic events. The FASB is the most direct beneficiary of the framework. 2. r����\&� ��/�d� �7�=��~�h����P(�a-{����ږ�
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1. Provide the conceptual framework of the FASB. 2 - Discuss the relationship among historical cost,... Ch. Discuss alternative strategies for selecting target markets. By John M. (Neel) Foster, FASB Member, and L. Todd Johnson, Senior Project Manager Although some of the FASB’s constituents—especially those that interact with the Board on a regular basis—are quite familiar with the FASB’s conceptual framework, many others either are How would an increase in the world price of oil affect the amount of frictional unemployment? The primary purpose of the conceptual framework is to provide guidance to ________. What does it mean to run a deficit in the merchandise... What are the approaches to obtaining an RFP? consider the FASB’s Concept Statements as authoritative, the FASB (2006, vi) states that ‘‘the GAAP hierarchy is under reconsideration,’’ implying that the Conceptual Framework will be included in the hierarchy. The FASB uses a conceptual framework, which is a set of concepts that guide financial reporting. What are the... Ch. 1. Statements in the series are intended to establish objectives and fundamentals that will be the basis for development of financial accounting and reporting standards. The FASB is the most direct beneficiary of the framework. 2 - Which characteristic states that accounting... Ch. 2 - How do accounting concepts, principles, standards,... Ch. Being unable to quickly develop standards for rare situations is one limitation of the FASB. What is the Conceptual Framework of the FASB? The most direct beneficiary of the conceptual framework is actually the FASB itself. The Conceptual Framework. a. The FASB Conceptual Framework was established in 1973 as a comprehensible set of standards and rules intended to address and solve new emerging issues. The FASB’s Conceptual Framework helps the Board in setting sound financial accounting and reporting standards. How should managers rank mutually exclusive projects? endstream
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2 - What is recognition in accounting? 2. 2 - What is the most general objective of financial... Ch. The Financial Accounting Standards Board (FASB) produced most of its Conceptual Frame-work (CFW) more than 20 years ago in a project that began in the 1970s. to develop a common conceptual framework that is both complete and internally consistent The objectives serve as a guideline in accomplishing the goals and purpose of the financial reporting. The conceptual framework articulates fundamental principles of accounting that are expected to guide and inform the FASB in its rulemaking activities. ����^��n�{E���2\����ԃD SFAC # 6 is one of a series of publications in the FASB conceptual framework for financial accounting and reporting. 2 - The information provided by financial reporting... Ch. 2, Qualitative Characteristics of Accounting Information. The projected income statement for the coming year, based on sales of ... Georgia McBeal is trying to save for her retirement. At its July 8, 2009, meeting, the FASB added the disclosure framework project to its technical agenda with the intent to improve the effectiveness of financial statement disclosures by more clearly aligning disclosure information required by U.S. GAAP with information most important to financial statement users. What'... What is a mutually exclusive project? Average rate of return Determine the average rate of return for a project that is estimated to yield total inco... Mays Beauty Store records sales and purchase transactions in the general journal. 2 - Qualitative Characteristics The following is a... Ch. Ch. For example, the framework provides the Board with theoretical guidance in selecting transactions, events, and circumstances to be accounted for. b. Is this unemploym... On the summary screen, you should sec an interactive chart. 2 - A friend, who is not an accounting major, is not... Ch. 2 - What drives expense recognition? What can cause it to change over time? 2 - Under Statement of Financial Accounting Concepts... Ch. 2 - Objectives, Users, and Stewardship The owners of... Ch. Revenue Recognition Revenue is an important indicator for users of financial reports in assessing a company’s performance and prospects. 1. It facilitates the generation of useful accounting information to those making investment and credit decisions in a way that helps them understand a company's economic resources, the claims to them and the changes in them. 2 - The following are brief descriptions of two... Ch. 2 - You have been hired as an accounting consultant by... Ch. 2 - Financial accounting and reporting provide... Ch. Ch. In 2004, the IASB and the FASB decided to review and revise the conceptual framework, however, changed priorities and the slow progress in the project led to the project being abandoned in 2010 after only Phase A of the original joint project had been finalised and introduced into the existing framework as Chapters 1 and 3 in September 2010. 3. The merchandise inventory was destroyed by fire on December 13. 2 - The concept of the reporting entity is a... Ch. b. Explain why principles-based standards require a conceptual framework. Describe a change in the tax code that might increase private saving. IASB uses the word “probable” in its recognition criteria, however, with a different meaning. In the first distribution, nine... Should an economic model describe reality exactly? Another important point is that FASB uses the word “probable” in its definition of assets and liabilities. 2 - Which of the following is considered a constraint... Ch. Identify... Ch. The FASB’s conceptual framework is the core in which all accounting standards are derived. The IASB/FASB conceptual framework revision project The joint conceptual framework project of the IASB and the FASB was initiated in 2002 as a direct result of the Norwalk Agreement, under which the two boards agreed to work jointly on future standards and to align existing ones. 2 - Why should financial reporting provide useful... Ch. 2 - Relevance versus Faithful Representation You are... Ch. 2 - What is conservatism? This suggests that conceptual issues are worked through at this level, rather than being guided by, and being consistent with, an overarching conceptual framework. The two boards reached the following tentative decisions about the approach to the project: 2 - Describe accrual accounting. 2 - What do the FASBs Concepts Statements establish? 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