【導(dǎo)讀】statements.UnitedStates.recognition,measurement,andreporting.standardsetting.accounting.environment.makingjudgments.pany.oftheenterprise.enterprise.management.users.ratetocharge.investment.owners.statementreports,

　　

【正文】 159 160 Recognition ? Recognition— Taking all the estimates and judgments into one number and using that number to make a journal entry. ? Recognition Criteria— For an item to be formally recognized, it must meet one of the definitions of the elements of the financial statements. – For example, revenue must meet the definition of revenue to be recorded and reported on the ine statement. ? Disclosure— Skipping the journal entry and just relying on the note to convey the information to users. 161 Measurement 1. Historical cost 2. Current replacement cost 3. Fair value 4. Net realizable value 5. Present (or discounted) value Five measurement attributes are: 162 Reporting ? Financial position at the end of the period ? Earnings ( ine) for the period ? Cash flows during the period ? Investments by and distributions to owners during the period ? Comprehensive ine for the period Included in the remended set of generalpurpose financial statements are reports that show the following: 163 Reporting Comprehensive ine differs from earnings in that it includes unrealized gains and losses not recognized in the ine statement. 164 Full Disclosure Principle For financial statements to be most effective, all relevant information should be presented in an unbiased, understandable, and timely manner. This is sometimes referred to as the full disclosure principle. 165 166 167 168 169 170 Traditional Assumptions 1. Economic entity 2. Going concern 3. Arm’slength transactions 4. Stable moary unit 5. Accounting period The FASB conceptual framework is influenced by five basic assumptions. 171 Traditional Assumptions of the Accounting Model Economic Entity The business enterprise is viewed as a specific economic entity separate and distinct from its owners and any other business unit. 172 Traditional Assumptions of the Accounting Model Going Concern In the absence of evidence to the contrary, the entity is viewed as a going concern. In other words, it is assumed that the enterprise will last indefinitely. 173 Traditional Assumptions of the Accounting Model Arm’sLength Transactions Transactions are assumed to occur between independent parties, each of which is capable of protecting its own interests. 174 Traditional Assumptions of the Accounting Model Stable Moary Unit The stable moary unit assumption allows for the ignoring of changes in the dollar’s purchasing power resulting from inflation. 175 Traditional Assumptions of the Accounting Model Accounting Period Because accounting information is needed on a timely basis, the life of a business is divided into specific accounting periods, usually one year. 176 Identify career opportunities related to accounting and financial reporting and understand the importance of personal ethics in the practice of accounting. OBJECTIVE 6 177 Pubic accountants do not work for a single business enterprise. Rather, they provide a variety of services for many different individuals and business clients. Careers in Financial Accounting Public Accounting 178 A large business enterprise employs financial accountants who are primarily concerned with external financial reporting, management accountants who are primarily concerned with internal financial reporting, and tax accountants. Careers in Financial Accounting Corporate Accounting 179 Careers in Financial Accounting Many students take accounting in preparation for being a user of financial statements. Credit analysts, investment bankers, brokers, and business consultants need a strong working knowledge of accounting as well as strong skills in information technology. User (Analyst, Banker, Consultant) 180 Chapter 1 The End