中央财经大学会专业英语教程Chapter_1.pptVIP

Net Realizable Value A method of determining the present value of a troubled asset to its present owner may be based on the assumption that the asset will be held for a period of time and sold at some future date. With regards to inventory, net realizable value(NRV) is the estimated selling price selling price in the ordinary course of business minus any cost to complete and to sell the goods. Net realizable value is also associated with accounts receivable. Current Value(Present Value) Is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and other factors such as investment risk. Pervasive Constraint User-Specific Quality Overall quality Primary Decision-Specific Qualities Ingredients of Primary Qualities Secondary and Interactive Quality Threshold for Recognition Additional Consideration Illustration 1-4 Hierarchy of Qualitative Characteristics of Accounting Information Accounting Information Benefits Costs PV FV T V RF N Comparability (Including Consistenc) Materiality Understandability Decision Usefulness Relevance Reliability Conservatism Illustration 1-4 presents a hierarchy of the qualititative characteristics of accounting information. This section presents an overview of the hierarchy, after which we define and discuss the components in detail. The hierarchy is bounded by three constraints. To be useful, accounting information must have each of the qualitative characteristics, at least to a minimum degree. Understandability Accounting information should be understandable to users who have a reasonable knowledge of business and economic activities and who are willing to study the information which reasonable diligence. Decision Usefulness Is the overall qualitative characteristic to be used in judging the quality of accounting information. Relevance Accounting information is relevant if it can make a difference in a decisi