FAR: FRAMEWORK 4: Recognition and Measurement in the Financial Statements

Recognition and Measurement in the Financial Statementes

INTRODUCTION

These topic covers guidance as to how financial informations are assessed and recorded to become a part of the financial statements.

LETS CREATE A MNEMONIC
In this lesson we will try to create a rhyme mnemonic. How? We will follow the steps below.

Imagine, Associate and Locate
Since we will use rhyme mnemonic, we will basically link the words we are trying to remember with words that rhyme with it. So lets make a list of words we are trying to remember and link with it the words that rhyme with it. We usually use funny, absurd, awkward, sexy unusual words as linkwords in order for us to remember them easily. After we find the link words, we use our imagination to combine these words and come up with a story or a situation. In doing so, we should visualize them as if we are a part of it.

Our Mnemonic
I came up with the following mnemonic:

You brought the ignition to the cafeteria (CRITERIA). When you walked in, you saw a rail and standing in it were Lance Armstrong (RELEVANCE) and Billy the Kid (RELIABILITY. You passed the ignition to them and they measured (MEASUREMENT) it. They said it was okay.

So you went out and made a public statement (FINANCIAL STATEMENT) outside the cafeteria.

After the public statement you brought the ignition with you and went straight to a tribute (ATTRIBUTES) concert for Michael Jacksons History (HISTORICAL COST) concert. You paid but they said they don't know your currency (CURRENT)so you assumed you might have been time traveling to the future (FUTURE). They asked you to go out and have it changed at the public market (MARKET VALUE).

So you went out and found a huge ass (ASSUMPTIONS) (a type of a horse and not the ass you are thingking of : >). The ass had a match (MATCHING) stick between its teeth. There's also an ant (ENTITY) in its head. It was standing on huge pile of money (MONETARY). It also had on its one foot a concert (CONCERN) ticket for Michael Jacksons history (HISTORICAL). There was also blood dripping from its behind meaning its having her period (PERIOD) (: >). He suddenly talked and said he is looking for an avenue (REVENUE) for a disco (DISCLOSURE) business . He also had a sign on his back that says conserve (CONSERVATISM) water. He saw you and shouted "Act! You!" (ACCRUAL)pointing at you.

Its a bit long but when you visualize the pcture in your mind you will realize that it is only a 3 second video clip.
Observe that I created a story. Check out the words inside the parenthesis. These are the words we like to remember as shown on the mind map above. The words before them are the links. These links are choosen since they rhyme with the words I like to remember. You might ask "Why do I need to link these words?". Well, we are actually using a mind tool that is far efficient than remembering by repetition.

Try visualizing the story on the mnemonic for few minutes. Visualize the story. When visualizing, don't mind the words in parenthesis.

Try remembering the story in your mind. Don't look at the mnemonic or the picture. You will observe that you actually remember the story. As soon as you can easily remember the story, try to draw in a piece of paper the mind map above from memory. All you have to do is think of the story we made up, then wirte the linking words, then the words we are trying to remember! This is actually easy if you get used to it.

Just be creative with your imagination. Make it realistic by involving real places, people or things that you actually know.

Practice is the key.

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