Intermediate Accounting 1 The Environment of Financial Reporting Financial Reporting Astatement of changes in stockholders equity also is included by many companies This statement summarizes the changes in each item of stockholders' equity for a period Accounting estimates and judgments are outlined in the notes to financial statements
Intermediate Accounting 1 The Environment of Financial Reporting Financial Reporting ➢ A statement of changes in stockholders’ equity also is included by many companies. This statement summarizes the changes in each item of stockholders’ equity for a period. ➢ Accounting estimates and judgments are outlined in the notes to financial statements
Intermediate Accounting 1 The Environment of Financial Reporting Generally Accepted Accounting Principles(GAAP) GAAP are the guidelines, procedures, and practices that a company is required to use in recording and reporting the accounting information in its audited financial statements
Intermediate Accounting 1 The Environment of Financial Reporting Generally Accepted Accounting Principles (GAAP) GAAP are the guidelines, procedures, and practices that a company is required to use in recording and reporting the accounting information in its audited financial statements
Intermediate Accountin The Environment of Financial Reporting Hierarchy of Sources of GAAP Level a Level c FASB Statements and Consensus positions of eitf Interpretations AICPA Practice Bulletins APB Opinions Level d CAP Accounting research Bulletins AICPA Accounting Interpretations SEC Regulation S-X and FASB Question and Answer Financial Reporting releases guides Level B AICPA Accounting Trends and FASB Technical bulletins Techniques AICPA Industry audit and Level e Accounting guides Other accounting literature AiCPA Statements of position A B C D E Higher authority Lower Authority
Intermediate Accounting 1 The Environment of Financial Reporting Hierarchy of Sources of GAAP • Level A – FASB Statements and Interpretations – APB Opinions – CAP Accounting Research Bulletins – SEC Regulation S-X and Financial Reporting Releases • Level B – FASB Technical Bulletins – AICPA Industry Audit and Accounting Guides – AICPA Statements of Position • Level C – Consensus Positions of EITF – AICPA Practice Bulletins • Level D – AICPA Accounting Interpretations – FASB “Question and Answer” guides – AICPA Accounting Trends and Techniques • Level E – Other accounting literature Higher Authority Lower Authority A B C D E