中南财经政法大学现代会计学(英语)第二章.pptVIP

Objectives 1. Understand FASB conceptual framework 2. Master Objectives of financial reporting 3. Master Types of useful information Master Qualitative characteristic of useful accounting information Master Accounting assumption and convention Know GAAP and financial statement Charges Given to the FASB Charges Given to the FASB The intent is to develop a theoretical foundation of interrelated objectives and concepts that leads to the establishment of consistent financial accounting standards. FASB Conceptual Framework The conceptual framework should provide a logical structure and direction to financial accounting and reporting. FASB Conceptual Framework To guide the FASB in establishing accounting standards. To provide a frame of reference for resolving accounting questions in situations where a standard does not exist. To determine the bounds for judgment in the preparation of financial statements. To increase users’ understanding of and confidence in financial reporting. To enhance comparability. Relationship of Conceptual Framework and Standard-Setting Process Conceptual Framework Projects for Financial Accounting and Reporting Objectives of Financial Reporting Other Issues Interrelationship of Final Reports, Useful Information, and Decision Making Types of Useful Information Return on investment Return on investment provides a measure of overall company performance. Once a company’s capital is maintained, the return on capital may be distributed to investors or may be retained by the company for reinvestment. Types of Useful Information Risk Risk is the uncertainty or unpredictability of the future results of a company. What cause the risk? Greater risk, higher return Types of Useful Information Financial Flexibility Financial flexibility is the ability of a company to take effective actions to change the amounts and timing of cash flows. Financial flexibility enables a company to respond to unexpected needs and opportunities. Financial flexibility redu