Accounting Requirements For Financial Instruments Essay
Because the real world accounting net income does not actually exist, the resulting measurement requires a lot of judgment and estimates. Different parties may differ in their preferred accounting policies. Therefore, it lay down criteria for these policies to determine net income. Due process is essential if investors are to get a reasonable compromise between the interests of the development of standards and managers. Here I will use 3 outside textbook references which relates to due process that help to support my points.
Credit-related impairment losses of financial assets. The project involves the preparation of reports. The goal of the project is to significantly improve the financial instrument users of financial statements report the decision usefulness. The Committee believes that accounting requirements for financial instruments, should be simplified result of this improvement. The committee 's goal is to develop financial assets make credit losses more timely identification of credit report card loss model (FASB, 2012).
IFRS 9 requires that when there is credit risk since the initial recognition of a significant increase in life expectancy recognized credit losses. Expected credit losses are expected in the new information and changes, even if there has not been a significant increase in the credit risk of each reporting date update.
Classification and Measurement—Joint Project of the FASB and IASB
The project to reconsider the classification…