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Intermediate Accounting Aims
- Capital allocation and investment decisions
- Help investors assess amounts, timing, and uncertainty of prospective cash receipts
- Clearly portray economic resources of an enterprise and claims on them
Intermediate Accounting Qualitative Concepts (Concepts No. 2)
- Understandablity
- Relevance (Predictive value, feedback value, timeliness)
- Reliability (Verifiability, representational faithfulness, neutrality)
- Comparability
- Consistency
Intermediate Accounting Basic Elements
- Assets
- Liabilities
- Equity
- Investments by Owners
- Distributions to Owners
- Comprehensive Income
- Revenues
- Expenses
- Gains
- Losses
Intermediate Accounting Recognition Assumptions Etc.
- Economic Entity
- Going Concern Assumptions
- Monetary Unit Assumption
- Periodicity Assumption
- Historical Cost Principle
- Revenue Recognition (realized, earned, recognition)
- Matching Principle
- Full disclosure
Intermediate Accounting Constraints
- Cost-benefit of producing information
- Materiality
- Industry practices
- Conservatism – choose least likely to overstate assets and income
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Conceptual Framework Aims
- Capital allocation and investment decisions
- Clearly portray economic resources of an enterprise and claims on them
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