Intermediate Accounting chapter 1-4
FASB - Financial Accounting Standards Board, the body responsible for promulgating
U.S. GAAP
SEC - Securities and Exchange Commission, regulates publicly traded companies
IASB - International Accounting Standards Board --- sets international financing
reporting standards (IFRS)
PCAOB - Public Company Accounting Oversight Board
-sets audit standards and oversees the audits of public companies in the U.S.
Qualitative Characteristics - Fundamental and Enhancing Qualities
Fundamental Characteristics - Basic characteristics that distinguish useful financial
information from information that is not useful
Relevance - Capable of making a difference in a decision
Predictive value- - helps provide accurate information to make a decision about the
future
Confirmatory Value- - Helps users confirm or correct prior expectations
Materiality- - Information that impacts users decisions if it was reported inaccurately or
omitted
Faithful Representation- - Indicates whether financial information depicts the substance
of an economic event in a manner
Complete- - All necessary information must be given
Neutral- - Information free from both, selection and presentation of financial data
Free from error - No errors or omissions in the description of the amount or the process
used to report the amount
Enhancing Characteristics - Characteristics that distinguish more useful information
from less useful information
Comparability - The ability of users to see similarities and differences between different
business activities
