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Normas de Información Financiera (Serie A1) - Coggle Diagram

- - - - Characteristics of Financial Information
        
        Reliable
        
        Verifiable
        
        Objective
        
        Consisten
        
        Provisional
        
        Useful
        
        Content
        
        Comparable
        
        Significance
        
        Relevant
        
        Timely
- - - - Matching Principle: This principle states that companies expenses must match with the company revenues. This means that companies need to use the accrual basis of accounting.
        
        As things like the revenues generated by advertising cannot be pre measured, the accountant must place this expenses in the period the ad is run.
      - Revenues Recognition (accrual):In this principle revenues are officially recognized and documented as soon as the product is sold or the service completed, despite when the money is actually received.
        Revenue must not be confused with a cash receipt.
- - - - Cost Principles: In accounting terms, the cost refers to the original amount of money paid for something. It doesn't matter if the good was bought yesterday or twenty years ago. This is expressed in financial statements as historical cost amounts.
        
        Inflation does not affect the Cost Principle, it never represents the amount of money the person or company would earn as an extra if they sold the asset or good on its current value.
      - Going-On Concern: This principle states that companies will continue to have their debts and commitments unless an accountant considers that the company will not be able to liquidate its debts and will have to disclose this assessment. Basically, a company still is a company, unless they face a bankruptcy estate.