Financial Accounting and Accounting Standards
Chapter 1
Financial Accounting and Accounting
Standards
Intermediate Accounting,
15th Edition
Kieso, Weygandt, and Warfield
1
Financial Statements and Financial
Reporting
• Goals or purpose of (financial) accounting
– Identification, measurement, and communication of financial information about – An economic entity to – Interested Parties (internal and external)
• Creditors, managers, unions, government agencies
Financial reports (statements) & notes
2
Financial Statements and Reporting
Economic Entity
Financial
Information
Accounting?
Identifies and Measures and Communicates
Financial Statements
Additional Information
Balance Sheet
President’s letter
Income Statement
Prospectuses
Statement of Cash
Flows
Reports filed with governmental agencies
Statement of
Owners’ or
Stockholders’ Equity
Note Disclosures
GAAP
News releases
Forecasts
Environmental impact statements
Etc.
Financial Statements and Financial
Reporting
• Managerial accounting
– Identification, measurement, analyzing, and communication of financial information to management for use in the corporation to plan, control, and evaluate performance
– For internal use
4
Financial Statements and Financial
Reporting
• Principal means of communicating financial information to outsiders is in the form of financial statements – “company’s history quantified in money terms”
• Most common financial statements
–
–
–
–
Balance Sheet
Income Statement
Statement of Cashflows
Statement of owners’ or stockholders’ equity
• Notes
5
Economic Entity
Financial
Information
Accounting?
Identifies and Measures and Communicates
Financial Statements
Additional Information
Balance Sheet
President’s letter
Income Statement
Prospectuses,
Statement of Cash
Flows
SEC Reporting
Statement of
Owners’ or
Stockholders’ Equity
Note Disclosures
GAAP
News releases
Forecasts
Financial Accounting and Accounting
Standards
Intermediate Accounting,
15th Edition
Kieso, Weygandt, and Warfield
1
Financial Statements and Financial
Reporting
• Goals or purpose of (financial) accounting
– Identification, measurement, and communication of financial information about – An economic entity to – Interested Parties (internal and external)
• Creditors, managers, unions, government agencies
Financial reports (statements) & notes
2
Financial Statements and Reporting
Economic Entity
Financial
Information
Accounting?
Identifies and Measures and Communicates
Financial Statements
Additional Information
Balance Sheet
President’s letter
Income Statement
Prospectuses
Statement of Cash
Flows
Reports filed with governmental agencies
Statement of
Owners’ or
Stockholders’ Equity
Note Disclosures
GAAP
News releases
Forecasts
Environmental impact statements
Etc.
Financial Statements and Financial
Reporting
• Managerial accounting
– Identification, measurement, analyzing, and communication of financial information to management for use in the corporation to plan, control, and evaluate performance
– For internal use
4
Financial Statements and Financial
Reporting
• Principal means of communicating financial information to outsiders is in the form of financial statements – “company’s history quantified in money terms”
• Most common financial statements
–
–
–
–
Balance Sheet
Income Statement
Statement of Cashflows
Statement of owners’ or stockholders’ equity
• Notes
5
Economic Entity
Financial
Information
Accounting?
Identifies and Measures and Communicates
Financial Statements
Additional Information
Balance Sheet
President’s letter
Income Statement
Prospectuses,
Statement of Cash
Flows
SEC Reporting
Statement of
Owners’ or
Stockholders’ Equity
Note Disclosures
GAAP
News releases
Forecasts