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AICPA Exam CPA-Financial Topic 3 Question 110 Discussion
Topic #: 3
Which of the following is correct concerning financial statement disclosure of accounting policies?
Choice 'b' is correct. Disclosure of accounting policies (and all other disclosure also) is an integral part of the financial statements.
Choice 'a' is incorrect. For disclosure of accounting policies, disclosure should not be limited to principles and methods peculiar to the industry in which the company operates. All material accounting policies should be disclosed.
Choice 'c' is incorrect. For disclosure of accounting policies, the format and location of accounting policies are not fixed by GAAP. Accounting policy disclosures are normally Note 1, but that is a (reasonable and very general) practice and not a 'rule.' It does make sense to disclose the 'why' before the 'what.'
Choice 'd' is incorrect. Disclosure of accounting policies should not duplicate details disclosed elsewhere in the financial statements.
Interim Financial Reporting
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