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SFAS No. 1

Decent Essays
Q1: Of what importance in a conceptual framework or metatheory are definitions of such basic terms as assets, liabilities, revenues, and expenses?
The conceptual framework is an attempt to provide a metatheoretical structure for financial accounting. SFAC No.3 defines 10 elements of financial statements. It is obviously a resolution of the definitions presented in the discussion mem for the conceptual framework project. Elements are what accounting professionals measure and the attributes is about how to measure. Definitions can be helpful to the financial statements which have been formulated in order to help professionals to specify the qualification are. Also, the definitions must be expressed in the metatheoretical structure.

Q6: How does earnings as
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2 is grounded in verifiability issues rather than property rights. Property rights approach lies in exchangeability of the asset. But property rights would indeed attach to research and development though it may be hard to measure. Therefore, I do not believe that SFAS No. 2 would be an example of Samuelson’s approach.

Q17. Would changing the asset definition in the conceptual framework to one concerned with property rights have any other ramifications? Discuss.
Samuelson believes that the assets definition should concentrate upon property rights that are concerned with wealth, which provides a true balance sheet orientation, rather than being concerned with revenue generation, Samuelson’s definition may lead to an exit value orientation for assets. One of the key points about the property rights approach lies in exchangeability of the asset. Samuelson’s viewpoint would result in certain deferred charges being expensed immediately even though their incurrence may bring about future economic benefits.

Q18. Is capital maintenance oriented toward proprietary theory or entity
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