Managment serious problem in applying fairness standard

Assignment Help Financial Accounting

Reference no: EM131217478

But We Need Only One Accounting Standard -- Fairness (Discussion Case 1-21 from the text)

In the 1970s, a leader in the accounting profession proposed that there really needed to be only one underlying standard to govern the establishment of generally accepted accounting principles. That standard was identified as fairness. Financial statements should be prepared so that they are fair to all users: management, labor, investors, and creditors. As changes occur in society, financial reporting should change to fairly reflect each user's needs. Because the financial statements are the responsibility of management, such a standard would require management to determine what reporting methods would be fair. What advantages do you see to this proposal? What would be managment's most serious problem in applying a fairness standard?

Reference no: EM131217478

Questions Cloud

The variable overhead efficiency variance : The Maxwell Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July: The variable overhead efficiency variance for ..

Using the installment sale method of accounting : Colton Company sold stud that cost $240,000 for $600,000 on January 1, 2015. The profit to be recognized in the first year (2015) using the installment sale method of accounting is: The profit to be recognized in the second year (2016) using the cost..

Prepare general journal entry : On January 15, 2016, Bravo Company billed a customer for $30,000 of services rendered to be collected at a later date. Prepare the general journal entry (without explanation) needed. If no entry is required then write "No Entry Required."

Based on expected monetary value of present worth : Your company owns a parcel of land in a currently undeveloped part of the cuntry. the neighboring city grows eastward, you belive there is 50% chance of residential development, a 20% chance of industrial development, and a 30% chance of no devlopmen..

Managment serious problem in applying fairness standard : In the 1970s, a leader in the accounting profession proposed that there really needed to be only one underlying standard to govern the establishment of generally accepted accounting principles. What would be managment's most serious problem in applyi..

Question: decision analysis value of information simulation : People frequently use three heuristics to assess probabilities and to predict values. Identify and describe these heuristics and identify and explain a bias to which each of these heuristics lead. A manufacturer is trying to choose between two produc..

When will the company be able to pay dividends : A company currently has a PAT of Rs 40 crore; depreciation is Rs 20 crore; capital expenditure is Rs 100 crore. If the PAT is expected to grow at 30 percent and capital expenditure at 10 percent, when will the company be able to pay dividends?

What is the acquisition cost of the land : Determining Acquisition cost. Tarpley, Inc. acquired land for $400,000. The closing costs amounted to $11,000 and the firm paid $7,250 for the current period's property taxes at the end of the year. What is the acquisition cost of the land?

Find the position of the closed loop poles : Find the range of K for closed-loop stability. - Sketch the system's root locus. - Find the position of the closed-loop poles when K=1 and K=2.

User Account

All Pages