中央财经大学会计专业英语教程Chapter 1.ppt

Full disclosure Principle This principle requires that circumstances and events that make a difference to financial statement users be disclosed. Financial Accounting Measurement bases Market Value(Fair Value) Historical Cost Net Realizable Value Current Value(Present Value) Market Value Market value is the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s –length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion. Historical Cost The economic activities and resourced of a company initially are measured by the exchange price of a t transaction at the time the transaction occurs. Usually the exchange price(the historical cost ) is retained in the accounting records as the value of an item until the item is consumed, sold, or liquidated and removed from the records. 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 (Incl