Objectives of Financial Reporting
The objectives of financial reporting are to provide:
- Information that is useful to potential and existing investors, lenders, and other creditors
- Information about the reporting entity's economic resources and claims against those resources
- Changes in economic resources and claims
- Financial performance reflected by accrual accounting
- Financial performance reflected by past cash flow
- Changes in economic resources and claims not resulting from financial performance
Financial statements are designed to meet the objectives of financial reporting:
|Balance Sheet||Direct Information||Financial Position|
|Statement of Earnings and Comprehensive Income||Direct Information||Entity Performance|
|Statement of Cash Flows||Direct Information||Entity Cash Flows|
|Financial Statements Taken as a Whole||Indirect Information||Management and Performance|
Qualitative Characteristics of Accounting Information
IFRS® and U.S. Conceptual Framework as Converged
|Fundamental Characteristics/Decision Usefulness||Enhancing Characteristics|
|Completeness||Benefit versus costs|
|Free from error|
Private Company Standards
Private company—“an entity other than a public business ...
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