Explain how accounting standards are established.
Answer to relevant QuestionsExplain historical cost and fair value models of accounting. What explains the move toward fair value accounting?It is difficult to measure the business performance of a company in the short run using only cash flow measures because of timing and matching problems. Describe each of these problems and cite at least one example for each.Accounting income has elements of both permanent income and economic income. Explain this statement.What are the major issues that an analyst needs to consider when analyzing financial statements prepared under the fair value accounting model?What is the relation between the reported value of assets and reported earnings? What is the relation between the reported values of liabilities, including provisions, and reported earnings?
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