3/3 100% + o Required: In each of the situations, discuss the appropriateness of the journal entries in terms of generally accepted accounting principles. Discussion Question (W): The concept of conservatism has been influential in the development of accounting theory and practice. A major effect of conservatism is that accountants tend to recognize loses, but not gains. For example, when the value of an asset is impaired, it is written down to fair value and an unrealized loss is recognized in the income statement. However, when the asset's value appreciates, its value is not written up to fair value. (An exception is current accounting for investments in securities having readily determinable fair value.) stated differently, accountants tend to recognize holding losses, but not holding gains. Students should try to address the following questions Define Conservatism Why do you believe conservatism has affected financial reporting? Explain Do you believe that financial statements that recognize losses but not gains provide information that is relevant and representationally faithful? Explain Do you believe that the concept of conservatism is consistent with the physical capital maintenance concept? Explain. Do you believe that the concept of conservatism is consistent with the financial capital maintenance concept? Explain. . . . Discussion Question (1) Roper Corporation purchased 100 storage boxes for the office. The boxes cost $15 each and should last at least ten years. Your arguments should be grounded on 1. the Conceptual Framework. 2. emphasizing the Objectives of Financial Reporting and 3. the qualitative characteristics of accounting information Debate (D): Argue for the capitalization of the boxes Debate (II): Argue against the capitalization of the boxes. Activ Foto de S 36C Ben