The first level consists of objectives.
The second level explains financial elements and characteristics of information.
The third level incorporates recognition and measurement criteria.
1.2 COMPARISON BETWEEN FINANCIAL AND MANAGEMENT ACCOUNTING
Management Accounting ---- The process of developing and reporting accounting information for internal users who have direct access to the information preparing.
1.2 COMPARISON BETWEEN FINANCIAL AND MANAGEMENT ACCOUNTING
Financial Accounting ---- The process of developing and reporting financial information for external users who do not have direct access to the information preparing which should be in accordance with General Accepted Accounting Principles (GAAP).
1.3 THE FASB’S FINANCIAL ACCOUNTING CONCEPTUAL FRAMEWORK
1.3-1 Objectives of the Conceptual Framework
The Framework is to be the foundation for building a set of coherent accounting standards and rules.
The Conceptual Framework
The Financial Accounting Standards Board (FASB) issues Statements of Financial Accounting Concepts. These statements constitute the conceptual framework of accounting.
The Framework is to be a reference of basic accounting theory for solving emerging practical problems of reporting.
1. Framework ---- Three levels of objectives elements and principles
Accounting information and decision makers
Accounting information
Financial accounting
External Decision makers
Management Accounting
Internal Decision makers
西方财务会计1
2020/8/9
Chapter 1
The Financial Accounting Conceptual Framework And The Accounting Equation
1.1 ACCOUNTING
A service activity ---- Provide useful information about economic entities to interested parties
GAAP
Generally accepted accounting principles are the measurement rules used to develop the information in financial statement. They are those guidelines which indicate how to report economic events. They consist of a number of concepts,principles and procedures.
And a measurement-communication activity---The usefulness of accounting information depends on effective measurement of the economic activities and effective communication of those measurements to users of that information.
Generally Accepted Accounting Principles
The Securities and Exchange Commission (SEC) has the authority to determine the financial statements to be provided to stockholders and the measurement rules applied in producing the statements. The Financial Accounting Standards Board (FASB) is currently recognized as the group responsible for establishing GAAP.