![]() ![]() ![]() It does not matter if cash has been received or paid. Revenue recognition principle holds that companies may not record revenue until (1) it is realized or realizable and (2) when it is earned.Most debts and securities are now reported at market values. Thus there is a trend to use fair values. This principle provides information that is reliable (removing opportunity to provide subjective and potentially biased market values), but not very relevant. Historical cost principle requires companies to account and report based on acquisition costs rather than fair market value for most assets and liabilities.To achieve basic objectives and implement fundamental qualities GAAP has four basic principles, and four basic constraints. FASB issues the final statement of principle, all principles are modified and refined as accountants respond to constantly changing business environment.FASB obtains responses to the exposure draft from Securities and Exchange Commission (SEC), the American Institute of Certified Public Accountants (AICPA), the American Accounting Association (AAA), public accounting firms, and other involved parties.FASB collects all responses and suggestions from Securities and Exchange Commission (SEC), the American Institute of Certified Public Accountants (AICPA), the American Accounting Association (AAA), public accounting firms, and other involved parties.FASB members issue a discussion memorandum,. ![]() This includes disclosures about accounting policies, significant judgments and estimates, and other relevant information.The Financial Accounting Standards Board (FASB) develops the Generally Accepted Accounting Principles (GAAP). The full disclosure principle requires companies to disclose all necessary information that could impact users' understanding and decision-making.
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