第二章-概念框架优秀PPT.ppt

《第二章-概念框架优秀PPT.ppt》由会员分享，可在线阅读，更多相关《第二章-概念框架优秀PPT.ppt（27页珍藏版）》请在淘文阁 - 分享文档赚钱的网站上搜索。

1、LOGOAccounting English Financial Accounting桂林电子科技大学信科学院唐风帆(18877319004)1Conceptual FrameworkvConceptual Framework is a theoretical guide to the practical issues,which plays importance roles to the professional Conceptual FrameworkvSFAC(Statements of Financial Accounting Concepts)issued by FASBSFAC N

2、O1:Objectives of Financial ReportingSFAC NO2:Qualitative Characteristics of Accounting informationSFAC NO3:Elements of Financial StatementsSFAC NO4:Recognition and Measurement of Elements SFAC 1:ObjectivesvObjectives:Decision Usefulness(1)Useful to make investment and credit decisions(2)Helpful to a

3、ssess the amounts,timing and uncertainty of future cash flow(3)About economic resources,the claims to those resources,and the changes of them(assume a level of competence on the part of users)SFAC 2-First Qualitative CharacteristicsvRelevance(relevant to decision making)For information to be relevan

4、t,it needs predictive value or feedback value,and presented on a timely basis.vReliability(reliable information)Representational faithfulness(information match what really existed)Verifiability(provable to be true)Neutrality(cannot select information to favor one over another)SFAC 2-Second Qualitati

5、ve CharacteristicsvComparability measure and report the different companies in a similar manner vConsistency A company can change methods,but it must first demonstrate that the newly adopted method is preferable to the SFAC:ElementsAssets:Probable future economic benefits obtained or controlled by a

6、 particular entity as a result of past transactions or events.Claims to assets come from two sources:Liabilities(outsider claims):economic obligations payable to outsiders/creditors.Owners equity(insider claims):assets hold by the owners of SFAC:ElementsAssets =Liabilities +Owners Equity(Economic Re

7、sources)=(Claims to Economic Resources)Balance Sheet(Statement of financial position):A snapshot of the companys financial position at a moment in SFAC:ElementsEventsAssetsliabilitiesEquityInvest$50000 to start the businessCash+50000Common Stock+500000Purchase equipment on accountEquipment+10000Acco

8、unts payable+10000Payment of cash dividendCash-4000Retained Earnings-40000Buy some productInventory+2000Cash -SFAC:ElementsRevenue:Increase in retained earnings from delivering goods or services to customer or clients.Expense:decrease in retained earnings that result from operations.If Revenues Expe

9、nses,net income/earnings/profitIf Revenues Expenses,net lossXXX earned net income of$870 million in 2012.Income statement(statement of Earnings)SFAC:ElementsEventsAssetsliabilitiesEquitySold of product(cost of$800)at the price of$1000Cash+1000Inventory-800Retained Earnings+200Cash+1000Revenue_sales

10、revenue+1000Inventory-800Expense_cost of sold+SFAC 4-Recognition PrinciplesvHistorical Cost Principle report most assets and liabilities on the basis of acquisition price(historical cost)which equals fair value.In subsequent periods,historical cost(reliable)and fair value(relevant)often diverge.vRev

11、enue Recognition Principle Revenue recognition generally occurs when realized/realizable or eared.Realized:exchanged the products/servicesRealizable:Assets are readily convertible into cashEarned:Substantial accomplishment of production SFAC 4-Recognition PrinciplesvMatching Principle Expenses be ma

12、tched with revenues whenever it is reasonable and practicable to do so.vFull Disclosure PrincipleDisclose fully and completely all relevant data with the sufficient importance to influence the SFAC 4-Basic AssumptionsvEconomic Entity Assumption Separate owners and managers from company Separate subs

13、idiary company from parent company vGoing Concern AssumptionAssume the company will have a long life.Depreciation and amortization policies are justifiable and appropriate only if we assume some permanence to the SFAC 4-Basic AssumptionsvMonetary Unit Assumption Money is the common basis for all acc

14、ounting measurement.(The monetary unit is relevantsimpleuniversally understandableuseful)vPeriodicity AssumptionThe periodicity assumption implies that a company can divide its economic into artificial time periods(monthlyquarterly yearly)SFAC 4-ConstraintsvCost-Benefit Relationship Information is n

15、ot free.The benefits of using information must surpass the cost of providing SFAC 4-ConstraintsvMateriality An item is material if its inclusion or omission would influence or change the judgment,otherwise immaterial.1.relative size(quantitative factors)In practice,anything under 5%of net income is

16、considered immaterial.COMPANY A COMPANY BIncome from operation$1,000,000$10,000Unusual gain$20,000$5,000Only company A can merge the unusual gain with the operation SFAC 4-ConstraintsvMateriality An item is material if its inclusion or omission would influence or change the judgment,otherwise immate

17、rial.(1)Relative size(quantitative factors)In practice,anything under 5%of net income is considered immaterial.(2)Importance(qualitative factors)Such a bride case or lawsuit(3)Separate or aggregate effectSuch as one subsidiaries gain$2 billion,another loss$1.5 billion SFAC 4-ConstraintsvIndustry Pra

18、ctices Some peculiar business requires departure from basic theory in certain cases,such a agricultural companies,public-utility companies.vConservatismWhen in doubt,choose the solution that will be least likely to overstate assets and income.Lower-of cost-or-market approach in valuing Conceptual Fr

19、ameworkvFor each item blow,indicate which category of elements it belongs to.1.Retained Earnings2.Sales3.Inventory4.Depreciation5.Loss on sale of equipment6.Interest payable7.Dividends8.Gain of sale of investment Conceptual FrameworkvIdentify which basic assumption of accounting is best described in

20、 each item below.1.The economic activities of FedEx Corporation are divided into 12-month periods for the purpose of issuing annual reports.2.Solectron Corporation does not adjust amounts in its financial statements for the effects of inflation.3.Walgreen Co.reports current and noncurrent classifica

21、tions in its balance sheet.4.The economic activities of General Electric and its subsidiaries are merged for accounting Conceptual FrameworkvIdentify which basic principle of accounting is best described in each item below.1.Norfolk reports revenue when it is eared instead of cash collected.2.Yahoo

22、recognizes depreciation for a machine over 2-year period during which that machine is used.3.Oracle reports information about pending lawsuits in the notes.4.Eastman reports land at the amount paid to acquired it,even though the estimated fair market value is Conceptual FrameworkvWhat accounting con

23、straints are illustrated by the items below?1.Zip Farms reports agricultural crops on its balance sheet at market value.2.Crimson does not accrue a contingent lawsuit gain of$6000.3.Wildcat does not disclose any information in notes to the financial statements unless the value of the information to

24、users exceeds the expense of gathering it.4.Sun Devil expenses the cost of wastebaskets in the year they are Conceptual FrameworkvDiscuss the appropriateness of the following entry?An order for$61500 has received from a customer.This order was shipped on January 9,2013.The company made the following

25、 entry in 2012.So following entry is made:Accounts Receivable$61500 Sales$61500 Conceptual FrameworkvDiscuss the appropriateness of the following entry?The president of Fresh Horse used his expense account to purchase a new car solely for personal use.So following entry is made:Miscellaneous Expense

26、$29000 Cash$29000 Conceptual FrameworkvDiscuss the appropriateness of the following entry?Because of a fire sale,equipment obviously worth$20000 was acquired at a cost of$155000.So following entry is made:Equipment$20000 Cash$155000 Revenue$45000 Conceptual FrameworkvDiscuss the appropriateness of the following entry?Materials were purchased on January 1,2006 for$122000.On December 31,2006,the materials would have cost$141000.So following entry is made:Inventory$21000 Gain on inventories$21000