Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 2 - Conceptual Framework for Financial Reporting - Review and Practice - Questions - Page 62: 29


Ideally, the cost of providing accounting information rather includes the costs of collecting, processing, distributing, auditing, potential litigation. disclosure to competitors, as well that of analysis and interpretation. The benefits to the prepares may include greater management control as well the access to capital at a lower cost. Users may receive better information regarding the allocation of resources, tax assessment as well the rate of regulation. Occasionally new accounting standards require presentation of information that is not readily assembled by the accounting systems of most companies.

Work Step by Step

Additionally, a determination should be made to quantify whether the incremental or additional costs of providing the proposed information exceeds the stipulated benefits to be obtained. To this effect, this determination requires careful judgement since the benefits of the proposed information may nt be readily apparent.
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