中級會計(jì)學(xué)中財(cái)課件

1、C H A P T E R 2CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTINGIntermediate AccountingIFRS EditionKieso, Weygandt, and Warfield Describe the usefulness of a conceptual framework.Describe efforts to construct a conceptual framework.Understand the objective of financial reporting.Identify the qualitative

2、characteristics of accounting information.Define the basic elements of financial statements.Describe the basic assumptions of accounting.Explain the application of the basic principles of accounting.Describe the impact that constraints have on reporting accounting information.Learning ObjectivesConc

3、eptual FrameworkFirst Level: Basic ObjectiveSecond Level: Fundamental ConceptsThird Level: Recognition, Measurement, and Disclosure ConceptsNeedDevelopmentOverviewQualitative characteristicsBasic elementsBasic assumptionsBasic principlesConstraintsSummary of the structureConceptual Framework For Fin

4、ancial ReportingNeed for a Conceptual FrameworkRule-making should build on and relate to an established body of concepts. Enables IASB to issue more useful and consistent pronouncements over time.Conceptual FrameworkLO 1 Describe the usefulness of a conceptual framework.Conceptual Framework establis

5、hes the concepts that underlie financial reporting.Development of a Conceptual FrameworkIASB and FASB are working on a joint project to develop a common conceptual framework Framework will build on existing IASB and FASB frameworks. Project has identified the objective of financial reporting (Chapte

6、r 1) and the qualitative characteristics of decision-useful financial reporting information.Conceptual FrameworkLO 2 Describe efforts to construct a conceptual framework.Three levels:First Level = Basic objectiveSecond Level = Qualitative characteristics and elements of financial statementsThird Lev

7、el = Recognition, measurement, and disclosure conceptsConceptual FrameworkLO 2 Describe efforts to construct a conceptual framework.Overview of the Conceptual FrameworkLO 2 Describe efforts to construct a conceptual framework.ASSUMPTIONSEconomic entityGoing concernMonetary unitPeriodicityAccrualPRIN

8、CIPLESMeasurementRevenue recognitionExpense recognitionFull disclosureCONSTRAINTSCostMaterialityOBJECTIVEProvide information about the reportingentity that is usefulto present and potentialequity investors,lenders, and othercreditors in theircapacity as capitalProviders.ELEMENTSAssetsLiabilitiesEqui

9、ty eExpensesIllustration 2-7 Framework for Financial ReportingFirst levelSecond levelThird levelQUALITATIVE CHARACTERISTICSFundamental qualitiesEnhancing qualities“To provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other

10、 creditors in making decisions in their capacity as capital providers.”First Level: Basic ObjectiveLO 3 Understand the objectives of financial reporting.OBJECTIVEProvided by issuing general-purpose financial statements.Assumption is that users have reasonable knowledge of business and financial acco

11、unting matters to understand the information. IASB identified the Qualitative Characteristics of accounting information that distinguish better (more useful) information from inferior (less useful) information for decision-making purposes.Second Level: Fundamental ConceptsLO 4 Identify the qualitati

12、ve characteristics of accounting information.Qualitative Characteristics of Accounting InformationIllustration 2-2 Hierarchy of Accounting QualitiesSecond Level: Fundamental ConceptsLO 4 Identify the qualitative characteristics of accounting information.Fundamental Quality - RelevanceRelevance is on

13、e of the two fundamental qualities that make accounting information useful for decision-making.Second Level: Fundamental ConceptsLO 4 Identify the qualitative characteristics of accounting information.Fundamental Quality Faithful RepresentationFaithful representation means that the numbers and descr

14、iptions match what really existed or happened.Second Level: Fundamental ConceptsLO 4 Identify the qualitative characteristics of accounting information.Enhancing QualitiesDistinguish more-useful information from less-useful information.Second Level: Fundamental ConceptsLO 4 Identify the qualitative

15、characteristics of accounting information.ASSUMPTIONSEconomic entityGoing concernMonetary unitPeriodicityAccrualPRINCIPLESMeasurementRevenue recognitionExpense recognitionFull disclosureCONSTRAINTSCostMaterialityOBJECTIVEProvide information about the reportingentity that is usefulto present and pote

16、ntialequity investors,lenders, and othercreditors in theircapacity as capitalProviders.ELEMENTSAssetsLiabilitiesEquity eExpensesIllustration 2-7 Framework for Financial ReportingFirst levelSecond levelThird levelQUALITATIVE CHARACTERISTICSFundamental qualitiesEnhancing qualitiesBasic ElementsLO 4Sec

17、ond Level: Basic ElementsLO 5 Define the basic elements of financial statements.Second Level: Basic ElementsExercise 2-4: Identify the qualitative characteristic(s) to be used given the information provided.Qualitative characteristic being employed when companies in the same industry are using the s

18、ame accounting principles.Quality of information that confirms users earlier expectations.Imperative for providing comparisons of a company from period to period.Ignores the economic consequences of a standard or rule.LO 5CharacteristicsRelevanceFaithful representationPredictive valueConfirmatory va

19、lueNeutralityCompletenessTimeliness VerifiabilityUnderstandabilityComparabilitySecond Level: Basic ElementsExercise 2-4: Identify the qualitative characteristic(s) to be used given the information provided.Requires a high degree of consensus among individuals on a given measurement.Predictive value

20、is an ingredient of this fundamental quality of information.Qualitative characteristics that enhance both relevance and faithful representation.LO 5CharacteristicsRelevanceFaithful representationPredictive valueConfirmatory valueNeutralityCompletenessTimeliness VerifiabilityUnderstandabilityComparab

21、ilitySecond Level: Basic ElementsExercise 2-4: Identify the qualitative characteristic(s) to be used given the information provided.Neutrality and completeness are ingredients of this fundamental quality of accounting information.Two fundamental qualities that make accounting information useful for

22、decision-making purposes.Issuance of interim reports is an example of what enhancing ingredient?LO 5CharacteristicsRelevanceFaithful representationPredictive valueConfirmatory valueNeutralityCompletenessTimeliness VerifiabilityUnderstandabilityComparabilityThird Level: Recognition, Measurement, and

23、Disclosure ConceptsThese concepts explain how companies should recognize, measure, and report financial elements and events.ASSUMPTIONSEconomic entityGoing concernMonetary unitPeriodicityAccrualPRINCIPLESMeasurementRevenue recognitionExpense recognitionFull disclosureCONSTRAINTSCostMaterialityLO 6 D

24、escribe the basic assumptions of accounting.Recognition, Measurement, and Disclosure ConceptsIllustration 2-7 Framework for Financial ReportingEconomic Entity company keeps its activity separate from its owners and other business unit. Going Concern - company to last long enough to fulfill objective

25、s and commitments.Monetary Unit - money is the common denominator.Periodicity - company can divide its economic activities into time periods.Accrual Basis of Accounting transactions are recorded in the periods in which the events occur.LO 6 Describe the basic assumptions of accounting.Third Level: A

26、ssumptionsBasic AssumptionsThird Level: AssumptionsLO 6 Describe the basic assumptions of accounting.E2-8: Identify which basic assumption of accounting is best described in each item below.The economic activities of FedEx Corporation (USA) are divided into 12-month periods for the purpose of issuin

27、g annual reports.Total S.A. (FRA) does not adjust amounts in its financial statements for the effects of inflation.Barclays (GBR) reports current and non-current classifications in its statement of financial position. The economic activities of Tokai Rubber Industries (JPN) and its subsidiaries are

28、merged for accounting and reporting purposes.PeriodicityGoing ConcernMonetaryUnitEconomic EntityMeasurementCost is generally thought to be a faithful representation of the amount paid for a given item.Fair value is “the amount for which an asset could be exchanged, a liability settled, or an equity

29、instrument granted could be exchanged, between knowledgeable, willing parties in an arms length transaction.”IASB has taken the step of giving companies the option to use fair value as the basis for measurement of financial assets and financial liabilities.Third Level: PrinciplesLO 7 Explain the app

30、lication of the basic principles of accounting.PrinciplesRevenue Recognition - revenue is to be recognized when it is probable that future economic benefits will flow to the company and reliable measurement of the amount of revenue is possible.Third Level: PrinciplesLO 7 Explain the application of t

31、he basic principles of accounting.Illustration 2-3 Timing of Revenue RecognitionExpense Recognition - outflows or “using up” of assets or incurring of liabilities (or a combination of both) during a period as a result of delivering or producing goods and/or rendering services.Third Level: Principles

32、LO 7 Explain the application of the basic principles of accounting.Illustration 2-4 Expense Recognition“Let the expense follow the revenues.”Full Disclosure providing information that is of sufficient importance to influence the judgment and decisions of an informed user.Provided through:Financial S

33、tatementsNotes to the Financial StatementsSupplementary informationThird Level: PrinciplesLO 7 Explain the application of the basic principles of accounting.Third Level: PrinciplesLO 7 Explain the application of the basic principles of accounting.BE2-9: Identify which basic principle of accounting i

34、s best described in each item below.(a) Parmalat (ITA) reports revenue in its e statement when it is earned instead of when the cash is collected.(b) Google (USA) recognizes depreciation expense for a machine over the 2-year period during which that machine helps the company earn revenue.(c) KC Corp

35、. (USA) reports information about pending lawsuits in the notes to its financial statements.(d) Fuji Film (JPN) reports land on its balance sheet at the amount paid to acquire it, even though the estimated fair market value is greater.Revenue RecognitionExpense RecognitionFull DisclosureMeasurementC

36、ost the cost of providing the information must be weighed against the benefits that can be derived from using it. Materiality - an item is material if its inclusion or omission would influence or change the judgment of a reasonable person. Third Level: ConstraintsLO 8 Describe the impact that constr

37、aints have on reporting accounting information.ConstraintsE2-11: What accounting constraints are illustrated by the items below?(a) Willis Company does not disclose any information in the notes to the financial statements unless the value of the information to users exceeds the expense of gathering it.(b) Beckham Corporation expenses the cost of wastebaskets in the year they are acquired.CostThird Level: ConstraintsMaterialityLO 8 Describe the impact that constraints have on reporting accounting information.Summary of the Str