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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 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
- Help investors assess amounts, timing, and uncertainty of prospective cash flows
- Help investors assess management's stewardship
Intermediate Accounting Qualitative Concepts
- Relevance (predictive value, feedback value)
- Representational faithfulness (completeness, neutrality, accuracy)
- Verifiability
- Timeliness
- Comparaibility
- Understandability
Conceptual Accounting Constraints
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