Wiley GAAP 2014: Interpretation and Application of Generally Accepted Accounting Principles

14   ASC 274 PERSONAL FINANCIAL STATEMENTS

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Basis of presentation

Measurement

Disclosures

Example: Hypothetical Set of Personal Financial Statements

PERSPECTIVE AND ISSUES

Subtopic

ASC 274, Personal Financial Statements, consists of one topic:

• ASC 274-10, Overall, that addresses the preparation and presentation of financial statements of individuals or groups of related individuals (i.e., families).

Overview

Personal financial statements are generally prepared to organize and plan an individual's financial affairs on a more formal basis. Specific purposes that might require the preparation of personal financial statements include the obtaining of credit, income tax planning, retirement planning, gift and estate planning, or the public disclosure of financial affairs. Third-party recipients of personal financial statements use them in deciding whether to grant credit, in evaluating the financial condition of individuals, in assessing the financial affairs of public officials and candidates for public office, and for other purposes. Estimated current values of assets and liabilities are almost always specified for use in the preparation of personal financial statements as this information is more relevant to users than historical cost.

DEFINITIONS OF TERMS

Source: ASC 274-10-20

Estimated current value of an asset. The amount for which an item could be exchanged between a buyer and a seller, each of whom is ...