Conceptual Framework The following extract is taken from the article A tale of 'prudence by Steve...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Conceptual Framework The following extract is taken from the article "A tale of 'prudence"" by Steve Cooper, which you were required to read as part of the course. Question 1 It may seem obvious that prudence is a desirable thing when preparing financial information; after all, would you wish for imprudent accounting? However, establishing the characteristics of useful financial reporting has long proved difficult and controversial. Until 2010, prudence was included in the International Accounting Standards Board's (IASB) Conceptual Framework. In the 2010 revision we removed the reference to prudence, but we are now proposing to put prudence back. So why is the IASB seemingly so indecisive? And why should investors care? Required Briefly outline the following: i) how prudence is defined in the IASB conceptual framework (2 marks) ii) how faithful representation is defined in the IASB conceptual framework (4 marks) iii) an example stated in the full article, supporting conservatism in accounting (3 marks) iv) why the IASB removed prudence from the conceptual framework (2 marks) v) why investors may support the re-inclusion of prudence in the conceptual framework (4 marks) Conceptual Framework The following extract is taken from the article "A tale of 'prudence"" by Steve Cooper, which you were required to read as part of the course. Question 1 It may seem obvious that prudence is a desirable thing when preparing financial information; after all, would you wish for imprudent accounting? However, establishing the characteristics of useful financial reporting has long proved difficult and controversial. Until 2010, prudence was included in the International Accounting Standards Board's (IASB) Conceptual Framework. In the 2010 revision we removed the reference to prudence, but we are now proposing to put prudence back. So why is the IASB seemingly so indecisive? And why should investors care? Required Briefly outline the following: i) how prudence is defined in the IASB conceptual framework (2 marks) ii) how faithful representation is defined in the IASB conceptual framework (4 marks) iii) an example stated in the full article, supporting conservatism in accounting (3 marks) iv) why the IASB removed prudence from the conceptual framework (2 marks) v) why investors may support the re-inclusion of prudence in the conceptual framework (4 marks)
Expert Answer:
Answer rating: 100% (QA)
i Prudence in the IASB Conceptual Framework is defined as the exercise of caution when making judgme... View the full answer
Related Book For
Introduction to Managerial Accounting
ISBN: 978-1259105708
5th Canadian edition
Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan
Posted Date:
Students also viewed these finance questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...
-
Write a structured flowchart for prob.2.3
-
Explain the management accountant's role in helping organisations design stronger incentive systems for their employees.
-
How do we ensure that our strategic goals are both ambitious and realistic, taking into account resource constraints and market dynamics?
-
The capital structure of Knightsbridge, Inc., at December 31, 2006, included 20,000 shares of \(\$ 1.25\) preferred stock and 40,000 shares of common stock. Common stock outstanding during 2007...
-
The following table provides the information necessary to construct a project network and project crash data: a. Construct the project network. b. Determine the maximum possible crash time for the...
-
The answer above is NOT correct. Evaluate sin x cos x dx. sin
-
A small bank is trying to determine how many tellers to employ. The total cost of employing a teller is $100 per day, and a teller can serve an average of 60 customers per day. On average, 50...
-
Express the complexity in Big O notation for the following. Show your work and all details. Void Function(int A, int n) { if (A <15) for (s=n; s>0; s/=2) for (t=n; t>0; t--) A++; else int sum = 0;...
-
Gross profit, operating profit, and net profit; the three most important profitability ratios. Business owners and managers may find varied usefulness of the other ratios calculated from the income...
-
5) It costs a company c(x) = -0.004x2 + 500x + 50000 to make its product. Find the marginal cost and use it to find how fast the cost is increasing when x = 2000 units. (4 points)
-
1. Place 0.5 g of well-powdered 3-nitrobenzoic acid and a stirring bar into a 10 mL round bottom flask. (The powdering is best done with a 25 mL Erlenmeyer and smooth surfaced weighing paper.) 2....
-
Identify and define at least one ethical framework that the company, Equifax, apparently employed in making its decision in that ethical dilemma. This is during the time that Equifax had a data...
-
An ideal gas initially at 325 K undergoes an isobaric expansion at 2.50 kPa. The volume increases from 1.00 m to 3.00 m and 12.0 kJ is transferred to the gas by heat. (a) What is the change in...
-
An investment Jakob is contemplating the purchase of a special van in which he can travel and service plants in remote areas. He estimates the following information for the potential purchase....
-
For each equation, (a) Write it in slope-intercept form (b) Give the slope of the line (c) Give the y-intercept (d) Graph the line. 7x - 3y = 3
-
Auto Parts is a division of MPI International, located in Wadena, Saskatchewan. Auto Parts manufactures various automobile parts, such as bumpers, fenders, and axles, and sells them to major auto...
-
Give two examples each of variable and fixed costs.
-
Genola Fashions, a U.S. company, began production of a new product on June 1. The company uses a standard costing system, establishing the following standards for one unit of the new product: During...
-
Prior to beginning the fieldwork on a new audit engagement in which a CPA does not possess expertise in the industry in which the client operates, the CPA should a. Reduce audit risk by lowering the...
-
The auditing standards used to guide the conduct of the audit are a. Implicitly referred to in the opening paragraph of the auditor's standard report. b. Explicitly referred to in the opening...
-
Describe at least three impediments to clarity.
Study smarter with the SolutionInn App