In light of the full disclosure principle, investors and creditors need to know the balances for assets, liabilities, and equity as well as the accounting policies adopted by management to measure the items reported in the balance sheet.
Instructions
If your school has a subscription to the FASB Codification, go to aaahq.org/asclogin.cfm to log in and prepare responses to the following. Provide Codification references for your responses.
(a) Identify the literature that addresses the disclosure of accounting policies.
(b) How are accounting policies defined in the literature?
(c) What are the three scenarios that would result in detailed disclosure of the accounting methods used?
(d) What are some examples of common disclosures that are required under this statement?