BFA 714 Financial and Corporate Accounting
Before reading this chapter, please consider how you would answer the following seven questions. We will return to these questions at the end of the chapter, where we suggest some answers.
1. What is the difference in role between a conceptual framework for financial reporting and accounting standards?
2. What benefits are generated as a result of having a conceptual framework for financial reporting?
3. What qualitative characteristics will useful financial accounting information be expected to possess?
4. What are the five different ‘elements’ of financial accounting?
5. What are the three main components of the definition of assets?
6. Are all assets required to be measured using the same basis of measurement?
7. What role does ‘materiality’ have with respect to deciding whether particular financial information should be disclosed?
8. What motivates individuals to support and perhaps lobby regulators for certain accounting methods in preference to others?
9∙ What are the implications for particular types of organisations and their stakeholders if one method of accounting is chosen or mandated in preference to other methods?
10∙ How will particular stakeholder groups react to particular accounting information?