Understanding Accounting
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ACC 300 · Meeting 4 · Thu 9/10

Understanding GAAP in the US

60 slides · Unit 1 · Optional Kieso: Chapter 1, sections 1.1-1.2; Chapter 2, sections 2.1-2.4 · Meeting overview

Lecture

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  1. Slide 1. Before-class trivia
  2. Slide 2. Understanding GAAP in the US
  3. Slide 3. What We've Covered So Far
  4. Slide 4. What if companies chose their rules?
  5. Slide 5. Distinguish accounting authorities
  6. Slide 6. Find authoritative GAAP
  7. Slide 7. Evaluate financial information
  8. Slide 8. Who sets the rules?
  9. Slide 9. Trace US reporting authority
  10. Slide 10. Map WorldCom's classification
  11. Slide 11. (Mis)classification: a $2B profit
  12. Slide 12. Assign each reporting role
  13. Slide 13. Which source answers your question?
  14. Slide 14. Trace authority to the Codification
  15. Slide 15. How does FASB amend GAAP?
  16. Slide 16. Who remains responsible?
  17. Slide 17. Management remains responsible
  18. Slide 18. The Conceptual Framework
  19. Slide 19. What guides FASB's decisions?
  20. Slide 20. The Framework developed over decades
  21. Slide 21. How to Use the ASC
  22. Slide 22. How large is the ASC?
  23. Slide 23. How does FASB organize the guidance?
  24. Slide 24. Explore the ASC's nine areas
  25. Slide 25. Read an ASC paragraph address
  26. Slide 26. Use section numbers to navigate
  27. Slide 27. Large topics require precise citations
  28. Slide 28. Read an Update's number
  29. Slide 29. Where can you read the ASC?
  30. Slide 30. What follows a search result?
  31. Slide 31. Check whether the guidance applies
  32. Slide 32. Research advertising costs
  33. Slide 33. Account for an advertisement
  34. Slide 34. Research the accounting question
  35. Slide 35. Choose the Expenses area
  36. Slide 36. Open Topic 720
  37. Slide 37. Open Subtopic 35
  38. Slide 38. Check Section 15
  39. Slide 39. Open a known ASC address
  40. Slide 40. Check the advertising scope
  41. Slide 41. Confirm the case scope
  42. Slide 42. Open the recognition section
  43. Slide 43. Read the permitted policies
  44. Slide 44. Read the supporting requirements
  45. Slide 45. Check the amendment dates
  46. Slide 46. When is the ad expensed?
  47. Slide 47. Apply the company's first-use policy
  48. Slide 48. Expense the ad when aired
  49. Slide 49. Complete the reporting conclusion
  50. Slide 50. Evaluate financial information
  51. Slide 51. Why does GAAP help users?
  52. Slide 52. What makes information useful?
  53. Slide 53. Why does the information matter?
  54. Slide 54. Relevance connects information to decisions
  55. Slide 55. What did WorldCom's reports suggest?
  56. Slide 56. How could users be misled?
  57. Slide 57. Explain why the difference matters
  58. Slide 58. What changed at WorldCom?
  59. Slide 59. The reports changed the user's picture
  60. Slide 60. Verify filing figures

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Contents

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Background and objectives Slides 1–7

  1. 1 Before-class trivia
  2. 2 Understanding GAAP in the US
  3. 3 What We've Covered So Far
  4. 4 What if companies chose their rules?
  5. 5 Distinguish accounting authorities
  6. 6 Find authoritative GAAP
  7. 7 Evaluate financial information

Accounting authority Slides 8–17

  1. 8 Who sets the rules?
  2. 9 Trace US reporting authority
  3. 10 Map WorldCom's classification
  4. 11 (Mis)classification: a $2B profit
  5. 12 Assign each reporting role
  6. 13 Which source answers your question?
  7. 14 Trace authority to the Codification
  8. 15 How does FASB amend GAAP?
  9. 16 Who remains responsible?
  10. 17 Management remains responsible

The Conceptual Framework Slides 18–20

  1. 18 The Conceptual Framework
  2. 19 What guides FASB's decisions?
  3. 20 The Framework developed over decades

How to use the ASC Slides 21–31

  1. 21 How to Use the ASC
  2. 22 How large is the ASC?
  3. 23 How does FASB organize the guidance?
  4. 24 Explore the ASC's nine areas
  5. 25 Read an ASC paragraph address
  6. 26 Use section numbers to navigate
  7. 27 Large topics require precise citations
  8. 28 Read an Update's number
  9. 29 Where can you read the ASC?
  10. 30 What follows a search result?
  11. 31 Check whether the guidance applies

Research advertising costs Slides 32–49

  1. 32 Research advertising costs
  2. 33 Account for an advertisement
  3. 34 Research the accounting question
  4. 35 Choose the Expenses area
  5. 36 Open Topic 720
  6. 37 Open Subtopic 35
  7. 38 Check Section 15
  8. 39 Open a known ASC address
  9. 40 Check the advertising scope
  10. 41 Confirm the case scope
  11. 42 Open the recognition section
  12. 43 Read the permitted policies
  13. 44 Read the supporting requirements
  14. 45 Check the amendment dates
  15. 46 When is the ad expensed?
  16. 47 Apply the company's first-use policy
  17. 48 Expense the ad when aired
  18. 49 Complete the reporting conclusion

Decision usefulness Slides 50–59

  1. 50 Evaluate financial information
  2. 51 Why does GAAP help users?
  3. 52 What makes information useful?
  4. 53 Why does the information matter?
  5. 54 Relevance connects information to decisions
  6. 55 What did WorldCom's reports suggest?
  7. 56 How could users be misled?
  8. 57 Explain why the difference matters
  9. 58 What changed at WorldCom?
  10. 59 The reports changed the user's picture

Next class Slides 60–60

  1. 60 Verify filing figures