Question

1 * explain how the accounting estimates and errors are in FASB and in IFRS. what are the similarities and differences.

2 * Using the FASB coding as an information resource, do you believe that the Statement of Cash Flows adds value to the financial statements?

Answer 1

The accounting estimates and errors in FASB have been dealt with in the profit and loss account. The international Financial Reporting Standards have also given due importance to the accounting estimates and errors by providing a separate standard for accounting estimates and errors. Thus, the similarity between FASB and IFRS is the huge importance which both have given to the accounting estimates and errors. The major differences between the two is the issuance of a separate standard in IFRS for dealing with accounting estimates and errors.

Yes, the statement of cash flows definitely add value to the financial statements as the cash flow statements provide information about the generation of cash from different sources and utilization of cash for different operations to provide the users of the financial statements detailed information on the ability of an organization to generate cash flow from its business operations, investment activities and financing activities.