Conceptual Framework
C38FA-Financial Accounting | November 26
2012
| Topic- Conceptual Framework
Name: Kashish Jashnani
HW ID: H00114889
Conceptual Framework
Introduction
Conceptual framework is defined as the “a coherent system of interrelated objectives and fundamentals that can lead to consistent standards and that prescribes the nature, function, and limits of financial accounting and financial statements.” [wiley.com, 2002]. The conceptual framework is needed in the accounting body due to two reasons. Firstly, to be beneficial, standard setting must form on and transmit to a well-known body of concepts and purposes. Secondly, new and developing real-world troubles should be more rapidly solved by reference to a current framework of basic concept.
In a wide sense a conceptual framework is able to be seen as an effort to describe the character and reason of accounting. A conceptual framework should take into account the theoretical and conceptual matters containing financial description and structure a logical and reliable foundation so as to strengthen the development of accounting standards. The purpose of conceptual framework is to assist the IASB in developing a consistent basis for upcoming accounting standards that are principles-based, internally dependable, globally converged and also examine the existing ones. [ifrs.org, 2012]
International Accounting Standards Board (IASB)
The IASB framework defines the ideas and principles fundamental in the preparation of financial statements for presentation to widespread users. This framework operates as a principle, a parameter and sets out the reach of International Accounting Standards. It denotes the very establishment of international financial reporting and denotes the basis from which all IASs emanate [articlesbase.com, 2012] .The IASB framework is the most commonly appropriate conceptual framework which was submitted in 1989. The IASB’s conceptual framework sets International
2012
| Topic- Conceptual Framework
Name: Kashish Jashnani
HW ID: H00114889
Conceptual Framework
Introduction
Conceptual framework is defined as the “a coherent system of interrelated objectives and fundamentals that can lead to consistent standards and that prescribes the nature, function, and limits of financial accounting and financial statements.” [wiley.com, 2002]. The conceptual framework is needed in the accounting body due to two reasons. Firstly, to be beneficial, standard setting must form on and transmit to a well-known body of concepts and purposes. Secondly, new and developing real-world troubles should be more rapidly solved by reference to a current framework of basic concept.
In a wide sense a conceptual framework is able to be seen as an effort to describe the character and reason of accounting. A conceptual framework should take into account the theoretical and conceptual matters containing financial description and structure a logical and reliable foundation so as to strengthen the development of accounting standards. The purpose of conceptual framework is to assist the IASB in developing a consistent basis for upcoming accounting standards that are principles-based, internally dependable, globally converged and also examine the existing ones. [ifrs.org, 2012]
International Accounting Standards Board (IASB)
The IASB framework defines the ideas and principles fundamental in the preparation of financial statements for presentation to widespread users. This framework operates as a principle, a parameter and sets out the reach of International Accounting Standards. It denotes the very establishment of international financial reporting and denotes the basis from which all IASs emanate [articlesbase.com, 2012] .The IASB framework is the most commonly appropriate conceptual framework which was submitted in 1989. The IASB’s conceptual framework sets International
References: 1) Financetrain.com (2012) IASB Conceptual Framework for Financial Reporting | Finance Train. [online] Available at: http://financetrain.com/iasb-conceptual-framework-for-financial-reporting/ [Accessed: 21 Nov 2012]. 2) Iasplus.com (2012) IAS 17 — IAS Plus. [online] Available at: http://www.iasplus.com/en/standards/standard15 [Accessed: 19 Nov 2012]. 3) Ifrs.org (2012) Frequently asked questions. [online] Available at: http://www.ifrs.org/Current-Projects/IASB-Projects/Conceptual-Framework/Pages/Frequently-Asked-Questions.aspx [Accessed: 21 Nov 2012]. 5) Ifrs.org (2012) Conceptual Framework (PAUSED). [online] Available at: http://www.ifrs.org/Current+Projects/IASB+Projects/Conceptual+Framework/Conceptual+Framework.htm. [Accessed: 23 Nov 2012]. 6) Ifrs.org (2004) IFRS - IASB October 2004. [online] Available at: http://www.ifrs.org/Current+Projects/IASB+Projects/Conceptual+Framework/Meeting+Summaries+and+Observer+Notes/IASB+October+2004.htm [Accessed: 23 Nov 2012]. 7) Kelly, M. and Kelly, M. (2012) Accounting for Leases - IAS 17 Leases. [e-book] http://www.cpaireland.ie/UserFiles/File/students/Artilces%202009/P1_Accounting_for_leases.pdf [Accessed: 20 Nov 2012]. 8) Soobaroyen, R. (2008) The Iasb Framework. [online] Available at: http://www.articlesbase.com/accounting-articles/the-iasb-framework-527769.html [Accessed: 20 Nov 2012]. 9) ACCA - Financial Reporting (2007). [e-book] http://images.canotes.multiply.multiplycontent.com/attachment/0/TM-KVwooCGQAADrmbvo1/ACCA-F7-BPP-Study-Text.pdf?key=canotes:journal:35&nmid=380279886 [Accessed: 19 Nov 2012]. 10) IAS 17 Leases (2012). [e-book] http://www.ifrs.org/Documents/IAS17.pdf [Accessed: 20 Nov 2012]. 11) Conceptual Framework Underlying Financial Accounting (2010). [e-book] http://www.wiley.com/college/kieso/0471072087/samplechapter/ch02.pdf. [Accessed: 23 Nov 2012].