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FASB Concepts Statement No. 2, Qualitative Characteristics of Accounting Information, does not provide conceptual guidance necessary for making trade-offs in accounting standards focusing on, among other things, the primary characteristics of relevance and reliability and the qualities of comparability and consistency.
Because of compromises necessary to issue it, FASB Concepts Statement No. 5, "Recognition and Measurement in Financial Statements of Business Enterprises," describes practices existing at that time, providing little, if any, conceptual basis for analyzing and attempting to resolve the controversial issues of recognition and measurement. Among other things, Concepts Statement 5 does not provide the requisite tools for assessing whether items should be measured at fair value and, if so, when (as it relates to initial and subsequent fair value measurements), at what level of aggregation, and how.
- The revenue recognition guidance in Concepts Statement 5 is inconsistent with the guidance in other areas of the conceptual framework, in particular, the definitions of liabilities (and other elements) in FASB Concepts Statement No. 6, "Elements of Financial Statements."
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