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Do Historical Cost Financial Statements Comply With The Objectives Of Sfac 1?, Michelle L. Bogner
Do Historical Cost Financial Statements Comply With The Objectives Of Sfac 1?, Michelle L. Bogner
Honors Capstones
The Financial Accounting Standards Board has issued Statements of Financial Accounting Concepts to provide the objectives which financial reporting should comply with. As the economic environment and markets have changed, there has been some controversy over whether historical cost information complies with these objectives. This paper reviews the objectives and comes to the conclusion that historical cost is satisfactory for the present, but a change will probably be needed in the future. Several alternatives are discussed and a gradual change to a valuation basis is recommended. User and preparer opinions are discussed and the recommendations take into account their opposition …