b) The Board may be required to abandon neutrality and establish standards of reporting that conceals the particular transactions impact from the users of the financial reports. These costs will, however, exist regardless whether or not FASB authorizes their recognition in financial statements. It will not alter the economics of transaction and it will only withhold information from the users of the financial reports while making informed decisions and, eventually, the credibility of financial reports is impaired.
c) The SEC relies on the Board and the private sector predecessors to establish and upgrade financial accounting and the reporting standards Accounting standards are therefore, established through a due process and open deliberations system to improve and certify the Board’s mission of improving financial reporting. By developing neutral accounting standards to the best interest of the public, similar transactions should be treated similarly and different transactions treated differently. This clearly shows that standard setting is in private sector in US.
d) Some accounting standards are subverted so that they can achieve their purpose which is not related to fair and accurate presentation of financial statements. They there fore fail in the purpose they serve and consequently lack economic effect since they are not of importance to decision makers on allocation of resources and making other economic decisions.
a) Dividends should be disclosed in changes of equity statement and in the notes as follows. Dividends that are declared are entered in the Retained Earnings account on the credit side and credited to the dividends payable account. When paid, dividends are posted to the dividends payable account in the debit side and to the Cash account, are posted to the credit side. Notes concerning the dividends can be illustrated as follows;
b) The provision for a law suit should not be disclosed because the likelihood of