Flashcards in Accounting standards and conceptual frameworks Deck (18):
Who has the legal authority to establish U.S. generally accepted accounting principles?
Securities and Exchanges Commission
How was the SEC established?
Securities Exchange Act of 1934
What became the single source of authoritative nongovernmental U.S. GAAP.
FASB Accounting Standards Codification
What does it mean when accounting and financial reporting practives not included in the Codification?
The Codification is composed of the following literature that had been issued by various standard setters?
Financial Accounting Standards Board, Emerging Issues Task Force, Derivative Implementation Group Issues, Accounting Principles Board Opinions, Accounting Research Bulletins, Accounting Interpretations, and AICPA
Are Accounting Standards Updates authoritative literature?
What is the purpose of IASB?
To develop a single set of high-quality, global accounting standards
What committee provides guidance on newly identified financial reporting issues not addressed in the IFRSs and assists the IASB in achieving international convergence of accounting standards?
International Financial Reporting Interpretations Committee
What standards did the International Accounting Standards Board adopt when it was created?
International Accounting Standards
What is the goal of the convergence project?
A single set of high-quality, international accounting standards that companies can use for both domestic and cross-border financial reporting
Are the Statements of Financial Accounting Concepts GAAP?
What are the 2 fundamental qualitative characteristics of financial information?
Relevance and faithful representation
What makes financial information relevant?
If it is capable of making a difference in the decisions made by users
What are the 3 factors in relevance?
Predictive value, confirming value, and materiality
What are the 3 characteristics of faithful representation?
Completeness, neutrality, and freedom from error
What is a neutral depiction of financial information free from?
What are the characteristics that enhance the usefulness of information that is relevant and faithfully represented?
Comparability, verifiability, timeliness, and understandability