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3 Cards in this Set
- Front
- Back
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Objectives of Financial Reporting
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1. provide info that is USEFUL to existing & potential investors, lenders, & other creditors to make decisions about providing resources (stock, loans) to the entity
2. provide info about the entity’s economic resources (assets) & claims against the entity (liabilities & stockholder equity) → Financial Position/Balance Sheet 3. change in economic resources (Income Statement) 4. ACCRUAL accounting bc it provides a better basis than cash acctg 5. financial performance reflected by past cash flows (OIF – operating, investing, and financing activities) 6. change in economic resources & claims, NOT resulting from financial performance (stock issue) |
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Primary Qualitative Characteristics
• RELEVANCE (Roger is PC) |
• Predictive Value (predict/forecast future results)
• Confirmatory Value (feedback of prior predictions) |
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Primary Qualitative Characteristics
• FAITHFUL REPRESENTATION (He's never on the FENC) |
• Free from Error
• Neutral (w/o bias) • Completeness |
