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(Objective of Financial Reporting) Homer Winslow and Jane Alexander are discussing various aspects of the FASB’s concepts statement on the objective of financial reporting. Homer indicates that this pronouncement provides little, if any, guidance to the practicing professional in resolving accounting controversies.
He believes that the statement provides such broad guidelines that it would be impossible to apply the objective to present-day reporting problems. Jane concedes this point but indicates that the objective is still needed to provide a starting point for the FASB in helping to improve financial reporting.
Instructions
(a) Indicate the basic objective established in the conceptual framework.
(b) What do you think is the meaning of Jane’s statement that the FASB needs a starting point to resolve accounting controversies?
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