100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Summary The Conceptual Framework - Financial Accounting $5.61
Add to cart
Quickly navigate to
Preview
  2.  
  3. University Of Cape Town (UCT)
  4.  
  5. Financial Accounting (ACC1006F)

Summary

Summary The Conceptual Framework - Financial Accounting

1 review
 1 purchase
  • Course
  • Financial Accounting (ACC1006F)
  • Institution
  • University Of Cape Town (UCT)
  • Book
  • Financial Accounting

Comprehensive notes, with a summary, and definitions list for first year Financial Accounting at UCT. The notes are on the conceptual framework (chapter 4 in the textbook "Financial Accounting an Introduction"). These notes are more than sufficient to do well. They include a compilation of lecture ...

[Show more]

Preview 3 out of 24  pages

Document information

  • No
  • Chapter 4
  • June 8, 2020
  • 24
  • 2019/2020
  • Summary

Subjects

  • financial accounting
  • acc1006f
  • accounting
  • financial accounting 1
  • acc1106f
  • uct accounting
  • first year accounts
  • conceptual framework
  • financial a
  • college of financial accounting
  • uct
  • university of cape town

Connected book

book image

Book Title:

Author(s):

  • Edition:
  • ISBN:
  • Edition:

More summaries for

  • FAC1502ASSIGNMENT QUESTIONS WITH CORRECT ANSWERS
All for this textbook (1)

Written for

  • University of Cape Town (UCT)
  • Financial Accounting (ACC1006F)
All documents for this subject (14)

1  review

review-writer-avatar

By: caleblester • 3 year ago

Seller

avatar-seller
jessrosie

Reviews received

Content preview

Conceptual Framework

Financial Accounting Standards

 Regulations
o Authority prescribes how businesses may do something
 GAAP (Generally Accepted Accounting Practise)
o Regulations that applies to the preparation of financial statements
 IFRS (International Financial Reporting Standards)
o Standards used by SA’s biggest businesses
 IASB (International Accounting Standards Board)
o They set the standards used by SA’s companies

Extra

International harmonization: the process of making accounting standards globally
applicable

Objectives of financial reporting

 To provide financial info that is useful to users in making decisions relating to
providing resources to the entity
 To provide financial info about assets, liabilities, equity, income & expenses
o That is useful in assessing the prospects of future net cash inflows and
management stewardship of the entity’s resources

Primary users of Financial Statements

1. Existing investors
2. Potential investors
3. Lenders (banks)
4. Creditors

Qualitative characteristics of useful financial information

1. Fundamental characteristics
 Relevance
o Predictive value: Information can be used to make predictions (ie: it has a
predictive value)

, o Confirmatory value: Information provides feedback about previous
evaluations
o Information is capable of making a difference to the user’s decision
 Faithful representation
o Complete (all necessary information is included)
o Neutral (Information has no bias; it is neutral)
o Free from error (accurate)
o Reveals the substance, rather than merely the legal form



2. Enhancing characteristics
 Comparability
 Verifiability
 Timeliness
 Understandability

Fundamental characteristics



PREDICTIVE
VALUE
RELEVANCE
CONFIRMATOR
Y VALUE

 Relevance
o Capable of making a difference to user’s decisions
 Predictive value: can be used to predict future outcomes
 Confirmatory value: provides feedback about previous evaluations
 Materiality: information is material if omitting/mis-formatting it could influence a user’s
decision (threshold is entity specific)

Faithful representation

, COMPLETE


FAITHFUL
REPRESENTATIO NEUTRAL
N

FREE FROM
ERROR


 Faithful representation: reveals the substance, rather than merely the legal form of the
economic phenomenon
o Complete: includes all information necessary for understanding
o Neutral: without bias; not weighted, manipulated, emphasized or de-
emphasized etc
o Free from error: description and process are without error, not necessarily
perfectly accurate

Prudence: concept that says assets and income must not be overstated, and liabilities and
expenses must not be understated

 Supports neutrality

Enhancing Characteristics

 Comparability
o Across time for one entity & across different entities
o Not uniformly
o Consistency helps
 Verifiability
o Different, knowledgeable, independent observers would reach the consensus
(the same decision)
o Can be direct or indirect
 Timeliness
o Info provided in time to influence decisions
 Understandability
o Present information clearly and concisely

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller jessrosie. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $5.61. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

68175 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 15 years now

Start selling
$5.61  1x  sold
  • (1)
Add to cart
Added