After completing this chapter you should be able to: Identify the major financial statements and other means of financial reporting; explain how accounting assists in the efficient use of scarce resources, describe some of the challenges facing accounting;.and other contents. | C H A P T E R 1 FINANCIAL ACCOUNTING AND ACCOUNTING STANDARDS Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield Identify the major financial statements and other means of financial reporting. Explain how accounting assists in the efficient use of scarce resources. Describe some of the challenges facing accounting. List the objectives of financial reporting. Explain the need for accounting standards. Identify the major policy-setting bodies and their role in the standard-setting process. Explain the meaning of generally accepted accounting principles (GAAP) and the role of the Codification for GAAP. Describe the impact of user groups on the rule-making process. Understand issues related to ethics and financial accounting. Learning Objectives 1. On the topic, “Challenges Facing Financial Accounting,” what did the AICPA Special Committee on Financial Reporting suggest should be included in future financial statements? Non-financial Measurements (customer satisfaction indexes, backlog information, and reject rates on goods purchases). Forward-looking Information Soft Assets (a company’s know-how, market dominance, marketing setup, well-trained employees, and brand image). Timeliness (no real time financial information) Securities and Exchange Commission American Institute of CPAs Financial Accounting Standards Board Changing role of the AICPA Financial Statements and Financial Reporting Parties Involved in Standard Setting Generally Accepted Accounting Principles Issues in Financial Reporting Accounting and capital allocation Challenges Objectives Need to develop standards FASB Codification Political environment Expectations gap International accounting standards Ethics Financial Accounting and Accounting Standards Service Cost - Actuaries compute service cost as the present value of the new benefits earned by employees during the year. Future salary levels considered in calculation. Interest on Liability - Interest accrues each year on the PBO just as | C H A P T E R 1 FINANCIAL ACCOUNTING AND ACCOUNTING STANDARDS Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield Identify the major financial statements and other means of financial reporting. Explain how accounting assists in the efficient use of scarce resources. Describe some of the challenges facing accounting. List the objectives of financial reporting. Explain the need for accounting standards. Identify the major policy-setting bodies and their role in the standard-setting process. Explain the meaning of generally accepted accounting principles (GAAP) and the role of the Codification for GAAP. Describe the impact of user groups on the rule-making process. Understand issues related to ethics and financial accounting. Learning Objectives 1. On the topic, “Challenges Facing Financial Accounting,” what did the AICPA Special Committee on Financial Reporting suggest should be included in future financial statements? Non-financial Measurements (customer satisfaction .
