After graduating from BSU, you take a job at a start-up company, Flutie Enterpri

Question

After graduating from BSU, you take a job at a start-up company, Flutie Enterprises. Your boss is unsure of what the standards state about which accounting policies your new company will have to disclose in their footnotes. Write a formal business memo to your boss, Doug Flutie, in good form. Include responses to the following questions. Be sure to provide codification references for your responses. a. Identify the literature that addresses the disclosure of accounting policies. b. How are accounting policies defined in the literature? c. What are the three scenarios that would result in detailed disclosure of the accounting methods used? d. What are some examples of common disclosures that are required under this statement? Pease provide citation from the FASB odification system

Explanation / Answer

( a & b) Accounting Policies can be defined as a set of rules which are provided by a national or international committee of accountancy for preparing and presenting the financial statements of the company. The reason for settimg theses rules are to bring consistency in financial statements of different entities and prohibiting the use of misleading policies. (c) Assets , Liabilities and Equity and material related party transactions should result in full disclosure of the accounting methods . (d) nature of relationship involved , amount due from or to related parties etc.

FASB sets some codification system in which the topic, subtopic, section, and paragraph are given.

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