Relevance information to financial reporting, Accounting Basics

Assignment Help:

Q. Relevance information to financial reporting?

To have relevance information should be pertinent to or affect a decision. The information should make a difference to someone who does not already have it. Appropriate information makes a difference in a decision either by affecting users' predictions of outcomes of past and present or future events or by confirming or correcting expectations. Note that information require not be a prediction to be useful in confirming, developing or altering expectations. Expectations are usually based on the present or past. For instance any attempt to predict future earnings of a company would quite probable start with a review of present and past earnings. Even though information that only confirms prior expectations may be less useful it is still relevant because it reduces uncertainty.

Critics have alleged that certain kinds of accounting information lack relevance. For instance some argue that a cost of USD 1 million paid for a tract of land 40 years ago and reported in the current balance sheet at that amount is irrelevant except for possible tax implications to users for decision making today. Such condemnation has encouraged research into the types of information relevant to users.


Related Discussions:- Relevance information to financial reporting

Effects of failing to prepare adjusting entries, Q. Effects of failing to p...

Q. Effects of failing to prepare adjusting entries ? Failure to organize proper adjusting entries causes net income and the balance sheet to be in error. You are able to see the

Traditional tax accounting job, The career paths outlined above don't nearl...

The career paths outlined above don't nearly cover all of the many professional options available to tax specialists. For instance are you concerned that a traditional tax accounti

Ethics on corporate governance, Critique the Ethics of those involved in th...

Critique the Ethics of those involved in the News of the World phone hacking scandal. Demonstrate in your critical analysis how the use of Ethics by the parties involved could have

Identify the errors, Company A has only been in existence for two full year...

Company A has only been in existence for two full years as a public company. Prior to this, it was a segment of large multinational and was spun off as stand-alone, public company.

What is owners invested cash, Q. What is Owners invested cash? When Met...

Q. What is Owners invested cash? When Metro Courier Inc was structured as a corporation on 2010 June 1 the company issued shares of capital stock for USD 30000 cash to Ron Chan

What are the various means of calculating depreciation, 1. Double declining...

1. Double declining method 2. Units of production method 3. Sum of year digit method 4. Straight-line method Depreciation Fund Method Insurance Method Annualy Method

Hello, Hello, I'm having trouble understanding Direct Cost, Overhead Cost a...

Hello, I'm having trouble understanding Direct Cost, Overhead Cost and Indirect Cost. ***Also Period cost and Product cost. please can anyone explain it and give examples for eac

Regular bonds at the time of issuance, Flying High Inc. plans to raise $5,0...

Flying High Inc. plans to raise $5,000,000 external financing through issuing bonds, and is considering two options: regular bonds and zero couple bonds.  The regular bonds will ha

Accounting entity assumption and matching principle, 1. For each of the fol...

1. For each of the following accounting assumptions/principles, explain a business transaction:   (a) Accounting Entity Assumption (b) Going Concern Assumption (c) Matching Prin

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd