Flashcards in Deck 1 Deck (8):
Ingredients of faithful representation include:
Completeness, neutrality, and freedom from error
Ingredients of relevance:
Predictive value, confirming value, and materiality
Two fundamental qualitative characteristics of financial reporting?
Relevance and faithful representation
Enhancing qualitative characteristics include:
Comparability, verifiability, timeliness, understandability
Recognize revenues/gains when the earnings process is complete; recognize expense/losses immediately
What happens when there is a "Change in entity"?
Financial statements of all prior periods presented should be restated
Revised depreciation =
Original cost - accumulated depreciation - any salvage value