BUS 251 Chapter Notes - Chapter 2: International Financial Reporting Standards, Accrual, Retained Earnings

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Maureen Fizzell

Document Summary

There are 2 sets of ways that a inancial statement has to be prepared. For public companies, they are to follow: internaional inancial reporing standards (ifrs) For private companies they are to follow: accouning standards for private enterprises (aspe) They are to provide informaion that is: relevant. Materiality (criical info = material = relevant) is company speciic, certain things that apply to one company may not apply to another: representaionally faithful. Free from error: comparability, veriiability, timeliness, understandability, cost constraint constraint not a characterisic. Cash basis of accouning: transacions are only recorded when the cash is actually received or paid out. Accrual basis of accouning: transacions are recorded in the period in which they occur, regardless of when the cash actually lowed into or out of the company. Template approach using the accouning equaion as the framework for transacion analysis and recording. Depreciaion expenses on equipment: straight- line depreciaion expense (slde)