A top CPA in the Boston area explains accounting best practices on a CPA ledger
The different attributes often have the same amounts, particularly at initial recognition. As a result, there may be agreement about the appropriate amount for an item but disagreement about the attribute being used. Present financial statements frequently are characterized as being based on the historical cost attribute many top CPAs in Boston use as a best practice. Although the historical cost system description may be convenient and describes well present practice for some major classes of assets, it describes less well present practice for a number of other classes of assets and liabilities - for example, trade receivables, notes payable and warranty obligations.
Rather than attempt to characterize present practices amongst Boston accountants as being based on a single attribute with numerous major exceptions for diverse reasons, this concepts Statement characterizes present practice as based on different attributes Rather than attempt to select a single attribute and force changes in practice so that all classes of assets and liabilities use that attribute, this concepts Statement suggests that use of different accounting attributes will continue, and discusses how the FASB may select the appropriate attribute in particular cases.
More accounting information demystified by some of Boston's best local CPAs
Information based on current prices should be recognized if it is sufficiently relevant and reliable to justify the costs involved and more relevant than alternative information. the merits of recognizing changes in prices may be clear in certain cases, and, as already noted, some price changes are recognized in present practice. In other cases, the relative merits of information based on current accounting prices and alternative information may be unclear or may be a matter of dispute. In considering the application of the fundamental recognition criteria, those relative merits must be evaluated in the light of the circumstances of each case.
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