Beruflich Dokumente
Kultur Dokumente
Reporting
and
Accounting
Standards
CHAPTER 1
(2)
economic entities to
(3)
interested parties.
GLOBAL MARKETS
GLOBAL MARKETS
GLOBAL MARKETS
GLOBAL MARKETS
In other words, this assumption states that businesses must keep their
transactions separate from their owners, business units or other
businesses transactions.
GLOBAL MARKETS
GLOBAL MARKETS
decisions
concerning
their
GLOBAL MARKETS
Economic Entity
Financial Statements
Additional Information
Financial
Information
Statement
Statement of
of
Financial
Financial Position
Position
Presidents
Presidents letter
letter
Accounting?
Income
Income Statement
or
or Statement
Statement of
of
Comprehensive
Comprehensive
Income
Income
Reports
Reports filed
filed with
with
governmental
governmental
agencies
agencies
Statement
Statement of
of Cash
Cash
Flows
Flows
Forecasts
Forecasts
Identify
and
Measure
and
Communicate
Statement
Statement of
of
Changes
Changes in
in Equity
Note
Note Disclosures
Disclosures
GLOBAL MARKETS
Prospectuses
Prospectuses
News
News releases
releases
Environmental
Environmental
impact
impact statements
statements
Etc.
Etc.
GLOBAL MARKETS
lenders, and
other creditors
the
Entity Perspective
Entity Perspective
Therefore, financial reporting from the perspective of the entity
involves reporting on the economic resources of that entity and the
claims to those resources held by its capital providers.
Decision-Usefulness
Investors are interested in assessing
1. the companys ability to generate net cash inflows and
2. managements ability to protect and enhance the capital
providers investments.
Financial reporting should therefore help investors assess the
amounts, timing, and uncertainty of prospective cash inflows from
dividends or interest, and the proceeds from the sale, redemption, or
maturity of securities or loans.
Decision-Usefulness
The emphasis on assessing cash flow prospects does not
mean that the cash basis is preferred over the accrual basis of
accounting.
Information based on accrual accounting generally better
indicates a companys present and continuing ability to generate
favorable cash flows than does information limited to the
financial effects of cash receipts and payments.
STANDARD-SETTING ORGANIZATIONS
STANDARD-SETTING ORGANIZATIONS
STANDARD-SETTING ORGANIZATIONS
2.
3.
4.
STANDARD-SETTING ORGANIZATIONS
STANDARD-SETTING ORGANIZATIONS
ILLUSTRATION 1-5
International
Standard-Setting
Structure
TYPES OF PRONOUNCEMENTS
Types
Types of
of Pronouncements
Pronouncements
International Financial Reporting Standards
The difference between these two sets of standards is merely one of timing;
the IASB standards issued before 2001 are called IAS (issued by
International Accounting Standards Committee IASC was the
predecessor of IASB) and those issued since 2001 are called IFRS (issued
by International Accounting Standards Board - IASB).
TYPES OF PRONOUNCEMENTS
TYPES OF PRONOUNCEMENTS
TYPES OF PRONOUNCEMENTS
HIERARCHY OF IFRS
STANDARD-SETTING ORGANIZATIONS
STANDARD-SETTING ORGANIZATIONS
Both the IASB and the FASB are hard at work developing
standards that will lead to the elimination of major differences in the
way certain transactions are accounted for and reported.
On the Horizon
International Convergence
Examples of how convergence is occurring:
1. Chinas goal is to eliminate differences between its standards and
IFRS.
2. Japan now permits the use of IFRS for domestic companies.
3. The IASB and the FASB have spent the last 12 years working to
converge their standards.
Forward-looking
information
includes
the
information concerning possible or assumed
future results of operations of the Company.
Generally, the older the information is, the less useful it is (e.g. fair value
measures for property, plant, and equipment