Case 2-2

Pamela Reynolds

ACC 563

Week 2 assignments

Case 2-2

i) “The overall objective of the conceptual framework project is to create a sound

foundation for future accounting standards that are principles-based, internally consistent and internationally converged. Therefore the IASB and the US FASB are undertaking the project jointly (Conceptual Framework (Paused)).”

ii)”The mission of the Emerging Issues Task Force (EITF) is to assist the FASB in improving financial reporting through the timely identification, discussion, and resolution of financial accounting issues within the framework of the FASB Accounting Standards Codification, which represents the source of authoritative standards of accounting and reporting other than those issued by the SEC, to be applied by nongovernmental entities (Emerging Issues Task Force (EITF)).”

“The term ‘standards overload’ is one that has been used off and on over the years by the FASB’s various constituent groups to describe their concerns about not only the volume of accounting rules and the level of complexity and detail of those rules but also the resulting profusion of footnote disclosures and the difficulty of finding all the accounting rules on a particular subject (The FASB addresses Standards Overload through New Projects).”

Case 2-4

“In the absence of evidence to the contrary, the entity should be viewed as remaining in operation indefinitely. In the presence of evidence that the entity has a limited life, it should not be viewed as remaining in operation indefinitely (Schroeder, Clark, & Cathey, 2011).”

“The historical cost reports temporary investments at their acquisition cost until disposal. Advocates of historical cost believe that an objectively verified purchase price provides the most relevant information about investments to decision makers. They also argue that current market prices do not provide any better information on future prices than does the original cost and that any realized gains...