Archive | Financial Reporting

Financial Reporting Framework

Accounting Assumptions: Underlying assumptions for the preparation and presentation of financial statements are accrual and going concern. Accrual assumption: The effects of transactions and other events are recognised when they occur (and not as cash or its equivalent is received or paid) and they are recorded in the accounting records and reported in the financial […]

7 Major Limitations of Financial Reporting

The following points highlight the seven major limitations of financial reporting. 1. The objectives of financial reporting are affected not only by the environment in which financial reporting takes place but also by the characteristics and limitations of the kind of information that financial reporting, and particularly financial statements, can provide. The information is to […]

Developing FASB’s Conceptual Framework: 4 Components

The following points highlight the four major components of Financial Accounting Standards Board (FASB) in developing conceptual framework. The components are: 1. The Objectives of Financial Reporting 2. The Qualities of Useful Information 3. Elements of Financial Statements 4. Recognition and Measurement. 1. The Objectives of Financial Reporting: The FASB’s first Statement of Financial Accounting […]

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