Conceptual Underpinings
What is the objective of general purpose financial reporting?
To provide financial information about the reporting entity that is useful in making decisions.
Information asymmetry: What is adverse selection?
It is a type of information asymmetry
whereby one or more parties to a
business transaction, or potential
transaction, have an information
advantage.
Information asymmetry: What is moral hazard?
It is a type of information asymmetry whereby one or more parties to a contract can observe their actions in fulfillment of the contract but other parties cannot.
What is the influence of information asymmetry on the risk premium?
The higher the information asymmetry, the higher the risk premium will be that risk-averse investors demand as a compensation for this uncertainty.
How can financial accounting help to reduce the asymmetries?
By providing the capital market and users of financial information with decision-useful information.
How will decision-useful information help reduce the assymetries?
Reduces the costs of capital for the corporation, since the risk premium will decrease as a function of decreasing information assymetrie.
The more informative ("decision-useful") the set of accounting rules, the lower the costs of capital.
Contracting perspective: emphasis on contracting costs
Demand for accounting information results from the contracts a firm enters into.
Contracting perspective: emphasis on corporate governance
Ensure policies that align the firm's activities with interests of investors and society.
Corporate governance: What is an efficient contract?
The best tradeoff between contracting costs and benefits.
What is the role of financial reporting for contract purposes?
To generate trust. This is costly so accounting standards help to reduce the cost of contracting.
Thehigher the precision of a set of accounting rules the lower the respective contracting costs.
What are the two theories of the role of financial accounting
Information economics perspective -> emphasizes the stewardship function of accounting = focus on reliable information.
Contracting perspective -> emphasizes the valuation function of accounting = focus on the relevance and decision usefulness of information.
What are the main objectives of IFRS?
Valuation: making the investment -> decision usefulness approach
Stewardship: protecting the investment -> monitor the management
What is the IFRS CF?
To develop the practice of financial reporting logically and consistently we need to adress fundamental issues.
-> A CF attempts to provide a structured theory of accounting.
What is the objective of general purpose financial reporting?
To provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity.
The key users of financial statement are capital providers.
FS should reflect the perspective of the entity.
Useful information: What are the fundamental qualitative characteristics?
Relevance = capable of making a difference in the decisions made by users.
Faithful representation = neutral, complete, free from error.
Useful information: What are the enhancing qualitative characteristics?
Comparability, verifiability, timeliness, understandability.
What is prudence?
The exercise of caution when making judgements under conditions of uncertainty.
What is asymmetric prudence?
Need for systematic asymmetry: losses are recognized at an earlier stage than gains are.
What is the going concern assumption?
IFRS financial statements are prepared under the assumption that the entity is going concern and will continue to operate for the foreseeable future.
What are the elements of financial position
Assets, liabilities and equity.
What are the elements of financial performance
Income and expenses
What are the general recognition criteria?
Relevant information about the asset or the liability and about any income, expenses or changes in equity;
Faithful representation of the asset or the liability and of any income, expenses or changes in equity; and
Information that results in the benefits exceeding the cost of providing that information.
Under which circumstances may recognition not provide relevant information?
It is uncertain whether an asset exists, or is separable from goodwill, or whether a liability exists;
There is only a low probability that an inflow or outflow of economic benefits will result; or
A measurement is available, but the level of measurement uncertainty is so high that the resulting information has little relevance.
Measurement: Relevance of information provided by measurement basis is affected by?
Characteristics of the asset or liability.
Contribution to future CF's.
Measurement: Whether a measurement basis can provide faithful representation is affected by:
Measurement inconsistency.
Measurement uncertainty.
Cuestionario |
---|
Strategie H1 |
Quiz |
chapter VI A Deductions |
HaloalkanesCFC's |
iil |
Room Categories |
Formes Taekwon-do |
KINE1102- midterm lecture 5 |
neymar |
anatomi |
KINE 1102- midterm lecture 4 |
chapter 19darwin and his theories |
spelling words |
spelling words eli |
Metabolism |
KINE1102- midterm lecture 3 |
biologie: planten |
6003 OS & Appl Security Week 7 Service Security Conceptsexam Practice |
adjectives - JPN |
Blood quiz - copy |
Español Examen |
Literary Terms C |
tj judet onsdag |
maths revison |
Science-Biology |
UE7-la vaccination toute une histoire |
compounds mixtures and chemical change |
introduction to elements |
Presentation 1 |
psychological explanations for offending behaviour |
lärande och utveckling 3 |
Imunoimuno |
Blood quiz |
Name the formulas |
Set 5 Vocab |
Nonfiction text features |
6003 OS & Appl Security week 7 Windows ServicesExam Study |
1.1 Nature of Economics |
TKMB |
sciencebb |
Physical science quiz |
chapter 1history if life, evolution, typological and population thinking |
states of matter |
no |
KINE1102 midterm lecture 2 |
Latin |
WHF 2 |
4.8 (Frans naar Nederlands)Als ik spelfouten heb gemaakt, laat maar weten.
p.s. je hoeft er niet bij te zetten of woorden mannelijk of vrouwelijk zijn als er les, of l' staat. :) |
KINE1102 midterm |
home work |
4.6 (Frans naar Nederlands)Als ik spelfouten heb gemaakt, laat maar weten.
p.s. je hoeft er niet bij te zetten of woorden mannelijk of vrouwelijk zijn als er les, of l' staat. :) |
öva mera på |
4.4 (Frans naar Nederlands)Als ik spelfouten heb gemaakt, laat maar weten.
p.s. je hoeft er niet bij te zetten of woorden mannelijk of vrouwelijk zijn als er les, of l' staat. :) |
4.2 (Frans naar Nederlands)Als ik spelfouten heb gemaakt, laat maar weten.
p.s. je hoeft er niet bij te zetten of woorden mannelijk of vrouwelijk zijn als er les, of l' staat. :) |
nytt mag o tarm glosor test 4 |
French and British Fur Trade: Chapter 4squiggle |
social feb 22 |
Computer Science1..4.2 |
UE7-Paléoanthropologie: aux origines de l'Humanité |
Franska prepositioner |
4.1 (Frans naar Nederlands)Als ik spelfouten heb gemaakt, laat maar weten.
p.s. je hoeft er niet bij te zetten of woorden mannelijk of vrouwelijk zijn als er les, of l' staat. :) |
Computer Science1.4.1 |
Cell Biology 25 (Manual flashcards) |
Cell Biology 25 |
Computer Science1.1.2 |
Philo |
Apah africa people-artworks |
temptations |
missouri laws |
B1 |
A321-200 |
Katakana Combination QuizKatakana combinations sounds to practise |
anouk |
4 kirja |
french |
science review A |
W&S |
Socio |
Les vêtement Par Sylvia Duckworth |
marketing |
Vocab |
TLE |
Cognition 2 |
Quiz - système lymphatique et immunitaire |
Quiz au sujet du sang et le coeur |
EXPH exam 2 |
Elliot Sokoloski |
espagnol |
bb |
Ali |
Nk |
gabby |
history in gaza |
history conflict in gaza |
komparerade adjektiv |
Chapter 12- The Heart |
adjektiv B |
adjektiv A |
Chapter 4 health science |
deklination 4 |
grupp 15 nominativ singular till genitiv singular |
deklination 3 grupp 15 |
deklination 3 grupp 9 |
deklination 3 grupp 8 |
deklination 3 grupp 7 |
deklination 3 grupp 4 |
deklination 3 grupp 3 |
deklination 3 grupp 1 |
PY1508.1 ~ {myths & where they come from} |
fortsättning deklaration 2 |
deklination 2 |
Macbeth quotes |
deklination 1 |
chapter 4+5 |
Biologie lab 2 |
Othello's character |
Desdemona / Othello |
Psychology Midterm |
Biologie Lab 1 |
Allotropes of CarbonAllotropes are different structural forms of the same element in 5he same physical stats. |
Unit 2 Animal Diversity |
unit d - macromolecules |
Test 1 |
révision France: une nouv place dans le monde |
jannelle monae - turntables |
fluently |
provflflf |
M.T. |
Test your knowledge |
CHAPTER 2: THE STRUCTURES OF GLOBALIZATION IN CONTEMPORARY WORLD |
Molecules with Hydrogen (Memorize) - type answer |
Molecules with Hydrogen (Memorize) |
Au XVe et XVle siècle, les européens organisent plusieurs expéditions pour explo |
INTRODUCTION QUIZ IN CONTEMPORARY WORLD |
Knowledge Test NJ - Advanced |
Anthro Quiz |
Lab Equipment |
Gut Brain Axis |
Digestive System |
glossary 2 |
Spanish M2- travel |
history 6 |
David |
En la ciudad |
mmpm |
it mangaement 4-6 |
Computational and Systems Neuroscience |
actors |
german 18 |
A330-300 - copy |
Dugga |
Unit 6 del 2 |
Rullmat Lus6 |
90 Day words |
Spanish |
m2 |
Unit 6 del 1 |
Spaans: beroepen |
Psykologi |
Rullmat Lus5 |
RullMat Lus4 |
RullMat Lus3 |
The returned (french show) |
RullMat Lus1 |
ALLEMAND 3 |
RullMat Lus2 |
Aller |
sat words |
exercise |
WC Hinduism test |
Week 5- Skin Care 2: Electric & HF |
First Aid - copy |
The Founding Father'sGovernment |
Pentecostalism in the USReligion |
United States GovernorsGovernors |
Week 4- Skin Care 2: Contagious Disorders, other disorders, Auto-immune Disorder |
Wk 5 Skin Penetration |
United States of America Road SystemsRoads |
Railroad HistoryRailroad |
Maryland Judicial SystemMaryland |
Maryand GeographyMaryland |
Maryland Zoning LawsZoning |
Wk 3 Comedones, Disincrustation, Extractions |
United States city populationState Government |
State LegislaturesState |
13th Amendment casesLaw |
Cases that Challenge US ConstitutionLaw |
Employment LawEmployment Law |
blodet |
Church LawLaw |
CitizenshipCitizenship |
Week 3- Skin Care 2: intro to skin conditions |
Constitutional AmendmentsUnited States Constitution |
Local Government Typesnone |
State Constitutionsnone |
State Courtsstate |
gas fundementals |
United States Federal CourtsCourts |
United States Federal JudiciaryCourts |
UESCA Running Coach Certification - copyUESCA Running Coach Certification - copy |
Periodic Table |
physique |
Inmuno |
in Vivo and ex Vivo Imaging Techniques |
sociologi |
Bookie's Nutrition Quiz |
Révision histoire guerre froide |
panspermia em português |
Abiogenese em portugues |
Macro Economie |
sociologi som vetenskap |
شريعة اسلامية |
Äbiogenesy |
Biologie |
Genetik |
Environmental Science |
First Aid - copy |
Dangerous Goods - copy |
Narkotika och psykisk ohälsa |
Science Lab Safety symbols |
First Aid |
go fishing |
Superhumans |
Romarriket, Antiken |
german 17 |
Titles and Authors 2024 |
Théorie de l'apprentissage examen mi-session |
Koine Greek Ch. 24 Subjunctive Mood |
Koine Greek Ch. 23 Perfect & Pluperfect Tenses |
politique |
Art |
Glosor |
EnglishStudy |
Tina 🤪what is the ionzation energy ? |
Chemistry |
Hebrew Actions |
Reponse CardsJapanese phrases for restaurant interactions |
12th night |
frans1 h3 |
FAR Inventory |
LOIRE |
Radioactivity |
pnf3 - kopia |
Weimar and Nazi Germany History |
NYA ZEELAND |
pnf3 |
VolcanoClassification of volcanoes, volcanoes style of eruption, types of volcanoes eruptions, classification of volcanoes, PHIVOLCS |
VolcanoesEruptions of volcanoes, the philippines is located along the ring of fire, classification of volcanoes |
😭 |
Sammansatta joner |
kemi syror och baser |
hff |
sj judet onsdag |
CHAPTER 2: ALFRED ADLER: Individual Psychology |
10-42 sWs |
IR french verbs |
ER french |
INTRODUCTION QUIZ IN TOP |
CHAPTER 1: SIGMUND FREUD PSYCHOANALYSIS |
buss |
vocabulary |
Hebrew |
Modalities |
History (20th Century) |
pedagogia |
introduction |