Fundamentals of Accounting for Accountants and Non-Accountants part2

In this part, we will explain the objectives, rationale and contents of Conceptual Framework of Financial Reporting and we will discuss the various qualitative characteristics of the proper and useful financial information.

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Concepts
-Means an abstract idea; a general notion; an idea of what something is or how it
works
General Principles and Standards of Accounting:
1) Generally Accepted Accounting Principles
2) Philippine Financial Reporting Standards
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Conceptual Framework
Status of Conceptual Framework:
1) Provides concepts and guidance
2) NOT a standard
3) Does NOT override a standard
-Is a system of ideas and objectives that lead to a creation of consistent set of
rules and standards
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Contents of Framework:
2.1) Fundamental
2.1.1 Relevant (predictive value; feedback value)
2.1.2 Faithful (complete; neutral; free from error)
2.2) Enhancing
2.2.1 Verifiability
2.2.2 Comparability
2.2.3 Understandability
2.2.4 Timeliness
2.3) Cost Constraint
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Contents of Framework:
3.1) Users
3.1.1 Internal
3.1.2 External
3.2) Basic Principles
3.2.1 Economic Entity
3.2.2 Monetary Value
3.2.3 Specific Time Period
3.2.4 Full Disclosure
3.2.5 Going Concern
3.2.6 Matching Principle
3.2.7 Accrual Basis
3.2.8 Materiality
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Contents of Framework:
3.3) Components
3.3.1 Statement of Financial Position
3.3.2 Statement of Financial Performance
3.3.3 Statement of Changes in Capital
3.3.4 Statement of Cash Flow
3.3.5 Notes to Financial Statements
3.4) Forms
3.4.1 Unconsolidated
3.4.2 Consolidated
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Contents of Framework:
5.1) Assets
5.2) Liabilities
5.3) Equity
5.4) Revenue/Income
5.5) Expenses
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Contents of Framework:
https://slideplayer.com/slide/7814567/
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Contents of Framework:
https://slideplayer.com/slide/7239806/
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Contents of Framework:
https://slideplayer.com/slide/7239806/
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Contents of Framework:
https://slideplayer.com/slide/7239806/
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Contents of Framework:
https://slideplayer.com/slide/7239806/
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Contents of Framework:
https://slideplayer.com/slide/7239806/
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Contents of Framework:
6.1) Historical Cost
6.2) Fair Value
6.3) Current Replacement Cost
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References:
A Closer Look in Fundamentals of Accounting
by De Jesus / Marasigan/ Salvador 2021 edition
www.slideplayer.com
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19. Launch