会计英语chaper.ppt

CHAPTER 2 THEORETICAL FRAMEWORK UNDERLIYING FINANCIAL ACCOUNTING Learning Objectives Know the conceptual framework for financial reporting Understand the qualitative characteristics of accounting information Describe the elements of financial statements Understand the basic assumptions and the basic principles of accounting Know the accounting regulation system in China Accounting theory What does accounting theory consist of ? Where do they come from? Nature of a Theoretical Framework A theoretical framework or conceptual framework is a coherent system of interrelated objectives and fundamentals that can lead to consistent standards and that prescribes the nature, function, and limits of financial accounting and financial statements. Role of conceptual framework Structure of conceptual framework Accounting assumptions 会计假设 Accounting principles 会计原则 First Level: Basic Objectives Second Level: Fundamental Concepts Qualitative characteristics of accounting information Elements of financial statements Recognition 确认 Measurement 计量 Second Level: Fundamental Concepts Qualitative Characteristics of Accounting Information Figure 2-2 in P16 Hierarchy 等级制度 Pervasive 普遍的 Threshold 门槛、起点、开端 Criterion 评判的标准、尺度 Elements of Financial Statements assets liabilities equity revenue expenses net income (or net loss) Third Level: Recognition and Measurement Concepts Basic assumptions Basic principles Constraints Accounting Entity Assumption Going Concern Assumption Money Unit Assumption Periodicity Assumption Questions: 1. ( )are the preconditions of identifying, measuring, recording and reporting economic transactions. 2. ( ) assumption implies the life of business should be divided into short ones. 3.( ) assumes the business will continue for a quite long time. 4. ( ) limits the economic data in the accounting system to data related directly to the activities of the business. 5.( ) requires that money be