FASB board members make standard-setting decisions guided by a conceptual framework that addresses the objectives of financial reporting and qualitative characteristics of accounting information.. Briefly describe the objectives of financial reporting and qualitative characteristics of accounting information
FASB board members make standard-setting decisions guided by a conceptual framework that addresses the following issues:
Objectives of financial reporting. The conceptual framework establishes the objective of providing information to current and potential investors, creditors, and others to assist them in making resource allocation decisions.
Qualitative characteristics of accounting information. The conceptual framework establishes the features of financial information that enable the information to meet the objectives of financial reporting. For example, the information should possess the following qualitative characteristics:
Relevance. The information should be pertinent to the decisions made by users of financial statements, in the sense of having the capacity to affect their resource allocation decisions.
Reliability. The information should represent what it is supposed to represent, in the sense that the information should correspond to the phenomenon being reported, and it should be verifiable and free from bias.
Comparability. The information should facilitate comparisons across firms and over time. Accounting information is comparable if firms account for similar events and transactions the same way.
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What will be an ideal response?
Charles Bonney, the sole stockholder of Kid Corporation, wrongfully used the corporation to avoid a personal liability. A court's disregard of the corporate entity to hold Bonney personally liable is called:
A) limited liability. B) ultra vires. C) diversity of interest. D) piercing the corporate veil.
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Answer the following statement true (T) or false (F)