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Timeliness and predictive value are the two main aspect of relevance.
An important segment of accounting theory is derived from the research process.
APB Opinion No. 5 was criticized on the grounds that it excluded many leases that
should be capitalized.
Under comprehensive allocation, the tax liability is equal to the income expense for the
period.
The functional currency is defined as the currency of the country in which the foreign
subsidiary is located.
Most firms elected to define funds in the statement of changes in financial position as
cash.
A shift toward the asset-liability orientation is evident in pension reporting
requirements, with both expense measurement and the requirement to recognize a
minimum balance sheet liability for unfunded pension benefits.
Positive accounting research attempts to explain behavioral relationships in accounting.
According to SFAS No. 142, goodwill is an intangible asset with an indefinite life.
SFAS No. 157 may result in a decrease in financial statement comparability among
firms.
Vesting refers to a qualifying period of pension plan membership that must be met
before contributions are made by the employer.
The relationship between risk and return for diversified portfolios is modeled by the
Security Market Line (SML).
Actuarial funding methods related to pensions are identical to pension expense
recognition methods.
It is no less true under SFAS No. 13 than it was under ARB 38 that more leases are
being capitalized than should be.
A reporting unit for the impairment test would be an operating segment of the firm or
one level below.
The usefulness of accounting information may be determined by directly asking
investors how they use annual reports.
