Accounting framework - convention of materiality, Financial Management

Accounting Framework - Convention of Materiality

Materiality means relative significance. In other words whether a matter should be disclosed or not in the financial statements depend on its materiality. American Accounting Association (AAA) describes 'Materiality' as follows. An item should be regarded as material if there is a purpose to believe in which knowledge of it would influence the decision of informed investors. Within this regard, the accountant is vitally concerned along with the following two significant matters:

(a)  Materiality of information; and

(b)  Materiality of amounts

The materiality depends on the amount and the nature of the account. It should be remembered that this doctrine of materiality also refers to separate disclosure of data in the published financial statements.

 

Posted Date: 2/6/2013 12:37:23 AM | Location : United States







Related Discussions:- Accounting framework - convention of materiality, Assignment Help, Ask Question on Accounting framework - convention of materiality, Get Answer, Expert's Help, Accounting framework - convention of materiality Discussions

Write discussion on Accounting framework - convention of materiality
Your posts are moderated
Related Questions
If all other things held constant, how would the market price of a bond be influenced if coupon interest payments were made semiannually in place of annually? Several bonds iss

Calculate the amplitude of the DC component: A periodic voltage consists of sinusoidal pulses having an amplitude of 150 V (SEE DIAGRAM BELOW). Use Fourier Series Expansion to

What does the “weight” refer to in the weighted average cost of capital? The weight considered to in weighted average cost of capital consider the portion of the total capital in

Q. Types of investment decisions? (1) Short-term investment decisions: - This kind of investment decisions related to the short-term assets. These decisions are as well called

The following are various types of orders prevalent in the US markets: Market Order : The most common form of order is the market order, which means the order to buy or sell at

Interest rates are the key determinants of business cycles in emerging market countries. In the past, several economies had experienced frequent and great changes

WHAT IS METHOD FOR FINDING IRR

Refer to the Bulldog battery company's cash budget in Table 18-7.  Explain why the company would probably not issue $1 million worth of new common stock in January to avoid all sho

In the NPV analysis, sunk cost is not relevant whereas opportunity cost is for project evaluation. Requirements: Explain and justify the above statement about sunk cost and

Part B This case is intended to be an introduction to the various methods used in capital budgeting and looks at some of the decisions that may have to be made when evaluating pro