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Hi Mike,
As per lec note, pg 3:
A conceptual framework
• framework has been developed
defined as “a constitution, a coherent system of interrelated objectives and fundamentals which can lead to consistent standards
and which prescribe the nature, function and limits of financial accounting and financial statements”• generally accepted accounting practice ( gaap )
• a combination of:
• each country’s own law
• international financial reporting standards
• stock exchange requirementsDoes this mean GAAP is an example of a regulatory framework?
No, it means that GAAP is developed and developing using the Framework as a structure within which to work
There’s a good article that explains the role of the Framework here:
https://www.accaglobal.com/content/dam/acca/global/pdf/sa_mar11_f7p2.pdf
Thanks Mike.
I will appreciate if you help me with small query on valuation of inventory:
Inventory is valued at lower of Cost & NRV.
Cost includes purchase cost, conversion and others.Purchase cost includes purchase price but excludes trade discount. Does it exclude cash discount as well?
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