Chapter 1--Financial Accounting and Accounting Standards
The Identification, measurement, and communication of financial information about economic entities to interested parties.
The process that culminates in the preparation of financial statements on the enterprise for use by both internal and external parties.
Users include: investors, creditors, managers, unions, and government agencies
The ones most frequently provided are: (1) the balance sheet (2) the income statement (3) the statement of cash flows (4) the statement of owners' or stockholders' equity
The process of providing other financial information through varying medium, including, but not limited to:
President's letter,supplementary schedules in the annual report, prospectuses, reports filed with government agencies, management forecasts.
Companies may need to provide such information because of authoritative pronouncement, regulatory rule, or voluntary disclosure.
Objectives of Financial Reporting
The objectives of financial reporting are to provide information that is: (1) useful in investment and credit decisions (2) useful in assessing cash flow prospects, and (3) about company resources, claims to those resources, and changes in them