Wiley GAAP 2020

13ASC 274 PERSONAL FINANCIAL STATEMENTS

• Perspective and Issues
  • Subtopic
  • Overview
• Definitions of Terms
• Concepts, Rules, and Examples
  • Personal financial statements consist of:
    • Basis of Presentation
  • Measurement
    • Assets
    • Liabilities
    • Use of a Specialist
    • Use of Information About Recent Transactions
    • Disclosures
    • Example—Hypothetical Set of Personal Financial Statements

PERSPECTIVE AND ISSUES

Subtopic

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

• 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

• Obtaining credit,
• Income tax planning,
• Retirement planning,
• Gift and estate planning, or
• Public disclosure of financial affairs for public officials and candidates for public office.

Estimated current values of assets and liabilities are almost always specified for use in the preparation of personal financial statements because this information is more relevant to users than historical cost.

DEFINITIONS OF TERMS

Source: ASC 274-10-20

Estimated Current Value. The amount for which an item could be exchanged between a buyer and a seller, each of whom is well informed and willing, and neither of whom is compelled to ...