The Financial Accounting Standards Board (FASB) is an autonomous board composed of accounting professionals who establish and communicate financial accounting and reporting standards in the United States. The FASB was formed in 1973 to create standards in the interest of the public; including issuers, auditors, and users of financial information. The mission of the FASB is to create accounting and reporting standards that will provide decision-useful information to investors and other users of
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indicated. Introduction .01 This section establishes a requirement that the independent auditor obtain written representations from management as a part of an audit of financial statements performed in accordance with generally accepted auditing standards and provides guidance concerning the representations to be obtained. Reliance on Management Representations .02 During an audit, management makes many representations to the auditor, both oral and written, in response to specific inquiries or
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AICPA Code of Conduct, Auditing Standards, SEC statements, practitioner journals, web sites, and the textbook. You do not need to reference class notes or your own thoughts. To format references, use any of the three generally accepted methods: APA, Chicago, or MLA. The Purdue Online Writing Lab offers free guidance on these methods at http://owl.english.purdue.edu/owl/section/2/. How do I access appropriate technical standards? * Public company auditing standards are available at no charge
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Revenue Recognition Dilemma U.S. GAAP Authoritative Guidance Accounting Standards Codification (ASC) 605-10-25-1 The recognition of revenue and gains of an entity during a period involves consideration of the following two factors, with sometimes one and sometimes the other being the more important consideration: a. Being realized or realizable. Revenue and gains generally are not recognized until realized or realizable. Paragraph 83(a) of FASB Concepts Statement No. 5, Recognition and Measurement
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Analysis of IFRS and U.S. GAAP GAAP or acronym for Generally Accepted Accounting Principles refers to the standard framework of guidelines for financial accounting used in any given jurisdiction. It is a common set of accounting principles, standards, and procedures that companies use to compile their financial statements (Investopedia). For many years, countries have developed their own accounting standards. The U.S. has always followed the U.S. GAAP while most European countries followed the
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these rules, where can a person find them, and which ones are more important?” One of the most common rules for financial reporting is GAAP, which is Generally Accepted Accounting Principles. GAAP are and is a combination of authoritative standards and simply the common accepted ways of recording and reporting accounting information from companies. GAAP can be found and imposed by companies so that investors have minimum level of consistency in the area of financial statements when analyzing
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CHAPTER 1 ENVIRONMENT AND THEORETICAL STRUCTURE OF FINANCIAL ACCOUNTING Overview The primary function of financial accounting is to provide useful financial information to users external to the business enterprise. The focus of financial accounting is on the information needs of investors and creditors. These users make critical resource allocation decisions that affect the nation’s economy. The primary means of conveying financial information to investors, creditors, and other external users
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first accounting issue associated with Runway Discount’s Refer-a-Friend program is identifying how the $25 referral credit should be recorded in Runway’s income statement. Is this consideration an adjustment of the selling prices of the vendor’s products or services, and therefore characterized as a reduction of revenue, or is it a cost incurred by the vendor for assets and services received from the customer, and therefore characterized as a cost or expense? The next significant accounting issue
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the fair value of the cost Runway would pay to earn a new customer from an unrelated third party or marketing firm. Runway Discount should record the $25 Referral Credit as a marketing expense. According to 605-50-45-2 of the FASB Accounting Standards Codification, the referral credit should be considered as a cost incurred because it meets both of the following conditions: a. Runway Discount receives an identifiable benefit in exchange for the $25 credit. In addition, the $25 credit is separate
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longterm purposes; borrowing money and repaying amounts borrowed, or otherwise settling the obligation; and obtaining and paying for other resources obtained from creditors on longterm credit”( FASB Accounting Standard codification, 2301045). As it also mentioned in FASB Accounting Standard Codification 230104514 and 230104515, then, “Proceeds from issuing bonds, mortgages, notes, and from other shortor longterm borrowing” and “payments of dividends or other distributions to owners, including
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