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Threshold Constraint Materiality Which of the above qualitative characteristics apply or do not apply to managerial/internal financial information?
To accomplish comparability and neutrality financial accounting/reporting must have rules, definitions and criteria: Separate entity Conservatism Continuity Period of Time Historical Cost Revenue Recognition Monetary Unit Matching Recognition criteria: 1. fit the definition of the item to be recorded 2. be measurable 3. be relevant and reliable Revenue must also be earned and realized or realizable. Expenses are recognized: 1) if direct then . 2) if long-term then . 3) if neither then.. Timing is everything! Managerial Accounting is not bound by these rules, definitions or criteria. Its all about COST/BENEFIT, and its all about the future.
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