ACCT 303 - Conceptual Framework

Created by mddifilippo 

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16 terms

Predictive Value

information is useful in predicting the future

relevance

pertinent to the decision at hand

timeliness

information is available prior to the decision

distribution to owners

decreases in equity resulting from transfers to owners

feedback value

information confirms expectations

reliability

along with relevance, a primary decision-specific quality

gain

results if an asset is sold for more than its book value

representational faithfulness

agreement between a measure and the phenomenon it purports to represent

comprehensive income

the change in equity from non-owner transactions

materiality

concerns the relative size of an item and its effect on decisions

comparability

important for making inter-firm comparisons

neutrality

accounting information should not favor a particular group

recognition

the process of admitting information into financial statements

consistency

apply the same accounting practices over time

cost effectiveness

requires consideration of the costs and value of information

verifiability

implies consensus among different measures

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