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Discussion Questions and participation questions week 1 - Essay Example
Finance & Accounting
Pages 3 (753 words)
1. The Financial Accounting Standards Board (FASB) was founded in 1973. “The mission of the FASB is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investors and other users of financial reports” (Fasb, 2011)…
The structure of the FASB is independent of other businesses or organizations. The FASB has seven full time employees. Each of them may serve up to two five year terms. Fasb.org (2011). Facts About FASB. Retrieved August 12, 2011 from http://www.fasb.org/facts/ 2. The accounting profession in the United States would be loss without the existence of the FASB. This organization has been helping accountants decipher the guidelines to apply in their work for over 38 years. You mentioned in your response that the FASB is managed by the Securities and Exchange Commission. For the SEC the FASB represents an organization whose mission and goals are aligned with the objectives of the SEC. Both the non-profit and profit industries are served by the FASB. 3. A capital lease is different than an operating lease because a capital lease transfers substantially all the benefits and risk of ownership of the lessee. In capital leases the present value of all cash payments for the lease are capitalized and recorded as an asset. The journal entry to record leased asset and lease liability is illustrated below: Leased Asset – Equipment 10000 Lease Liability 10000 Sometimes accounts referred to lease contracts as off-balance sheet liability. Operating leases are different from capital leases in that the intended use for the asset is temporary. 4. ...