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The Conceptual Framework in Accounting

Introduction, radical perspective, overlooked constituencies, reliability and caution, detection criteria, performance and income, implications, reference list.

Information qualities like neutrality, representational faithfulness, and reliability are significant qualities of accounting that both the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) employ when setting standards (Kaminski & Carpenter 2011). Standard setters bear in mind that although past Conceptual Frameworks (CF) are being used in accounting today, they have not been successful in providing accounting standards that accomplish the desired qualities. By presenting scholarly proof on this subject, this paper presents knowledge that will assist standard setters in creating essential resolutions regarding a successful conceptual framework in accounting. In addition, this paper examines different theories on this idea, studies the economic significance of accounting by determining if the noted associations control decisions concerning the valuation of a company, and finally presents a Conceptual Framework that could assist in generating accounting principles that achieve desirable qualities.

It is simple to observe and perpetuate the criticism of radical accountants to traditional accounting as compared with Conceptual Framework projects, which are still under use and depend on information excellence like representational faithfulness, reliability, and neutrality among other aspects that suppose an existing objective world. Traditional Conceptual Frameworks have failed in creating accounting values that realise the aforementioned information excellences (Solomons 1991). Additionally, it can be proposed that alterations of traditional accounting could help in meeting the disapprovals. Most accounting processes concur with the marginalist value theory. The reason behind this observation lies in the fact that the only value theory that the majority of accountants are familiar with is marginalism. In this regard, accountants concentrate every aspect of economics to marginalism.

It is vital for accountants to diverge from marginalistic patterns. The diversions alongside concessions have entirely been minimal (Solomons 1991). Nevertheless, even the highly bragged section of social accounting represents nothing much than just marginalism with exteriorities. The unconsciousness of accounting with respect to every value theory bears enough justification for affirming that accounting is unashamedly marginalist in its logical associations. According to Tinker (1991), theories, including accounting theory, signify items of social conflict. Marginalism forces accounting to bear a slanted representation of reality that acts as an ideological aspect since it misinterprets situations and occurrences in a bid to encourage particular partisan concerns.

Statements of account are employed in arriving at judgments regarding many diverse issues including securities of a corporation and evaluating liabilities of a company. This assertion does not denote either an unreceptive or a representational faithfulness for accounting is incorporated in the exchange practice like an informational product that enhances exchange. If accounting process were not incorporated in the process, then aggressive pressures would get rid of accounting like an unnecessary production cost (Solomons 1991). The distinction drawn concerning the representational faithfulness and passive functions of accounting, viz. the function of accounting as informational product for encouraging exchange, leads to utter confusion. For instance, an individual could invoke a representation of a phone that does not just pass the ideas of one party to another, but is as well turned into being a player in the process. Additional confusion stems from placing the solecism of capitalism on accountants and making accounting to appear responsible for fraud in addition to limitations associated with economic systems.

The FASB articulates the neglected aspects of accounting by the traditional Conceptual Frameworks. With respect to statements of accounts, the board affirms that, in order to recognise the requirements of creditors and shareholders, statements of accounts narrow the extent of financial judgments and different requirements for knowledge that statements of general function must meet (Birkin 1996). This justification is invalid with regard to statements of account for general use. Meeting these requirements has been of little concern to accountants and it is hard to generalise regarding the way to cover up these gaps (Solomons 1991).

A different charge presented by theories of radical accounting touch on ignored exteriorities. Accounting touches on the transactions that a firm carries out. In this regard, accounting takes into consideration the outlays for which a firm is identified to be lawfully accountable. Nevertheless, there might be additional costs that a firm inflicts on the community for which it is not lawfully accountable (Steer & Wade-Gery 1993). The latter aspects are not included in the records of a firm and thus are not part of its statements of account. Social costs that might not be entered include ecological pollution and effects of generating noxious but legal substances like tobacco. For instance, a vivid instance of a private outlay being shifted to the public occurs when a drinks producing company changes from utilising returnable bottles to using nonreturnable bottles. The expenditure on the community of getting rid of the nonreturnable bottles should be a deduction in coming to the social outlay of the producing company. However, the aforementioned social cost will be not feature in the statements of accounts of the company.

On the other hand, there exist other unaccounted constructive exteriorities are as well. For instance, a firm will note the outlay of erecting a billboard without crediting its accounts because of bettering the environment (Loft 1986). The same case applies to comparable attributes of decoration, like landscaping close to the offices of a firm. However, companies are not answerable to some of the negative externalities. For instance, air pollution by vehicles may not be blamed on the manufacturers, as drivers are to blame because of the states in which they maintain their vehicles. In addition, a beer bottle thrown by a careless individual may not be blamed on the producing company.

The exclusion of external costs in the statements of accounts of a company is noteworthy for a couple of explanations. The first explanation is the role of a company in bettering the community (Kadous, Koonce, & Thayer 2012). In this regard, the social improvement might equal the negative effects inflicted costs in the process. The second explanation for the omission of external costs is that they lead to an organisation being responsible for compensating people that suffer because of its endeavours. Even if there were validations for radical accountants in seeking notice of the catastrophes due to negative externalities to a company, they have nothing fresh to add with regard to gauging the influences of the externalities to a company. Moreover, not unless accounting reaches a point where it will be possible to resolve the calculation difficulties, there will be no solution for this accounting failure.

The argument on the suggested measurements brings about several subjects of reliability, mainly with regard to the calculation of complete goodwill (together with goodwill in the gained entity that is ascribable to marginal concerns). This aspect relies on the existence of a dependable assessment of the fair worth of the obtained entity, instead of just the available section (Power 2010). Paying back of goodwill was discarded in support of destruction testing. Critics recognised that destruction was subjective (as is the reduction of concrete assets), but stated that it warranted the accountability of executives for their spending on the possession, since in the course of its existence, the entire expenditure of goodwill could be converted to profit. With respect to this destruction assessment, there is no assurance due to the complexity of separating obtained from internally made goodwill. An associated subject is that the impairment assessment is weaker than it ought to be. This observation is occasioned by the fact that it does not take account of a consequent cash flow assessment like the one in the original model of the United Kingdom ASB that may be considered as a use of caution, but which is the entire asymmetric standard of impairment assessment.

A couple of detection criteria exist in the prevailing IASB Framework that includes the possibility that the company will get future cash gains (with regard to an asset) in addition to reliability of calculation. A number of recent pronouncements of the IASB have eradicated the possibility standard (Alexander & Archer 2003). This aspect disregards the element of doubt, and it is contradictory to the handling of other insubstantial assets.

The IASB boasts of a long-running task on reporting monetary feats, which has become extremely contentious, and the project is currently a section of a combined FASB project, viz. Presentation of Financial Statements (PFS). The key intention of the project was to boost the appearance of the revenue assertion to embrace a complete income assessment. This objective could be attained by having statements of accounts. A number of the members of IASB raised a strong and openly articulated fondness for just one statement in addition to a dislike to stipulated sub-totals like operating revenue (Rubenstein 1992). This move acted as the chief source of resistance, mostly from planners of accounts and as well from a number of consumers, who thought an assessment of working income was a significant pointer of management feat and a significant contribution to valuing the firm.

It is simple to conventionalise this approach as opposition to modification or management craving for something less than functional profit in which to conceal terrible news, although there is an additional commendable underlying principle. In several companies, the functions and margins on functions are stimulators of cash flow (Power 2010). In instances as such, it might well be extremely helpful to detach these mainstay actions from other actions like funding or non-mainstay deals like property possession. A clear representation of this advance has been affirmed in recent studies, which employed the case of assessing the Coca Cola Corporation to demonstrate how cost-derived earnings figures can be utilised in the assessment.

In his article, “Accounting and social change”, Solomons highlights the misleading notions of representational faithfulness and proves the legitimacy of Practical Reflexivity (omission). Practical Reflexivity reveals the way accounting frameworks deviate from fundamental economic actuality. Nevertheless, when declaring these divergences, Solomons does not succeed in dependably representing the social situations that replicate them (Tinker 1991). Solomons is unusually quiet concerning political creation of accounting signs. Apart from emerging as representationally faithful, Solomons appears evangelistic as well as an enthusiast (partisan) in bringing forward particular economic concerns and beneficiaries. Solomons proposes that accountants should develop multiple identities and sustain themselves in various psychic confines.

Another view presents the social world where functions are closely interlocked and conflicting with personal requirements to build up a social self-awareness for excelling clashes. An accountant emerges on numerous sections of a single dispute; ultimately, he might cause his own oppression and exploitation (Tinker 1991). For instance, an assessor that approves excessive consulting charges for ex-federal workers’ representatives might lessen the reliability of the public establishments on which he relies. Similarly, an accounting scholar that invents improved techniques of management control might finally add to his or her own scrutiny at work.

It is effortless to view the criticism of radical accountants to traditional accounting along with CF projects, which still remain in use and depend on information excellence like representational faithfulness, reliability, and neutrality among other aspects that suppose an existing objective world. Nevertheless, traditional Conceptual Frameworks have gained little or no success in creating accounting values that grasp the aforementioned information excellences. One response to the difficulty facing Conceptual Framework projects is that, it is impossible to develop universal and theoretically accurate accounting assessments. This scenario is unfortunate for such assessments can merely study what is noticeable, meaning that they cannot build up or assess recent reporting techniques. A more productive advance may be to distinguish that past Conceptual Frameworks are not liable to present universal remedies and as an alternative work in a restricted approach to resolve particular difficulties. In a bid to ensure success in generating accounting principles that achieve desired qualities, it is necessary to develop devices of testing for applications to particular problems devoid of claiming to offer universal resolutions. Probably, the time has come for them to cease attempting to act miracles like developing a universal excellent measurement technique from an intricate description anchored in conceptual assessment theory.

Alexander, D & Archer, S 2003, ‘On economic reality, representational faithfulness and the true and fair override’, Accounting & Business Research , vol. 33 no. 1, pp. 3-17.

Birkin, F 1996, ‘The ecological accountant: from the cogito to thinking like a mountain’, Critical Perspectives on Accounting, vol. 7 no. 1, pp. 231-257.

Kadous, K, Koonce, L & Thayer, J 2012, ‘Do Financial Statement Users Judge Relevance Based on Properties of Reliability’, Accounting Review vol. 87 no. 4, pp. 1335-1356.

Kaminski, K & Carpenter, J 2011, ‘Accounting conceptual frameworks: a comparison of FASB and IASB approaches’, International Journal of Business, Accounting, & Finance, vol. 5 no. 1, pp. 16-26.

Loft, A 1986, ‘Towards a critical understanding of accounting: the case of cost accounting in the UK’, Accounting, Organisations and Society , vol. 1 no. 1, pp. 137-169.

Power, M 2010, ‘Fair value accounting, financial economics, and the transformation of reliability’, Accounting & Business Research , vol. 40 no. 3, pp. 197-210.

Rubenstein, D 1992, ‘Bridging the Gap between Green Accounting and Black Ink’, Accounting, Organisations and Society , vol. 17 no. 5, pp. 501-508.

Solomons, D 1991, ‘Accounting and social change: a neutralist view’, Accounting, organisations and society, vol. 16 no. 3, pp. 287-295.

Steer, A & Wade-Gery, W 1993, ‘Sustainable Development: Theory and Practice for a Sustainable Future’, Sustainable Development , vol. 1 no. 3, pp. 23-35.

Tinker, T 1991, ‘The accountant as partisan’, Accounting, organisations and society, vol. 16 no. 3, pp. 297-310.

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2.4: The Conceptual Framework

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According the CPA Canada Handbook , "the purpose of the Conceptual Framework is to:

  • assist the International Accounting Standards Board to develop IFRS Standards that are based on consistent concepts;
  • assist preparers to develop consistent accounting policies when no Standard applies to a particular transaction or other event, or when a Standard allows a choice of accounting policy; and
  • assist all parties to understand and interpret the Standards." (CPA Canada, 2019).

A solid, coherent framework of principles is important not only to standard setters who need to develop new principles in response to changes in the business environment but also to practicing accountants who may encounter unusual or unique types of business transactions on a daily basis.

The IASB and the FASB had been working on a joint conceptual framework for several years, but this project was replaced by an IASB-only project, which was completed in 2018. This framework is currently used in Canada for publicly accountable enterprises. The conceptual framework used for private enterprises is very similar in content, although the structure, terminology, and emphasis differ slightly. We will focus on the IASB framework, which is located in Part 1 of the CPA Canada Handbook .

Accounting Concepts for Financial Reporting Essay

Introduction.

Nowadays, accounting can be considered as an essential part of the business world, as it standardises financial reporting and proposes universal measures. In this instance, an accounting concept can be described as a basic set of ideas that are used to guide the science of accounting (Knowledge flow 2014). It is highly important since it defines the general framework for financial reporting while depicting the main regulations that have to be followed.

It assists in avoiding confusion in accounting while making reporting concise, well-established, internationally understandable, and easy to interpret. Consequently, the primary goal of this paper is to explain the key accounting concepts in detail and provide different examples to enhance the understanding of these ideas. In the end, conclusions are drawn to summarise the main findings of the paper.

The Historical Cost Concept

To establish a foundation for discussion, the historical cost concept implies that the companies have to state in their balance sheets the monetary value of the asset at the moment of purchase or acquisition (Cunningham et al. 2014). It is evident that the economic environment tends to fluctuate. For example, an upward or downward shift is one of the factors that can affect the original price of the asset.

Thus, according to the historical cost concept, reporting the changes will create confusion, and it is a primary reason for not displaying these aspects in financial statements. For example, the enterprise purchased 1000 units for the price of $5. However, the price experienced changes, and now, it is $6 per unit. Nonetheless, the inventory will still be reported as $5,000 and not $6,000 since the principle of historical cost applies.

The Money Measurement Concept

Another essential accounting principle is the money measurement concept, and it is self-explanatory. This idea implies that only values of assets and liabilities that can be recorded in monetary terms are displayed in the financial statements (Knowledge flow 2014). It is highly linked to the reliability of the data, as reporting irrelevant financial values will cause confusion and inadequate reporting that can lead to fraud and violation of accounting standards. For example, it is evident that expenses associated with employees have clear monetary value and are often reported as costs for payroll and salaries. On the contrary, competences and know-how are often referred to as the most important assets of the company, but they cannot be evaluated in the monetary term, so they should not appear in financial statements.

The Business Entity Concept

The business entity principle is also of paramount importance, as it states that the transactions and operations of one company have to be separately recorded from other enterprises, organisations, and owners (Kolitz 2016). Following the ideas of this concept is crucial since it assists in making transactions transparent while easing taxation. For instance, the owner (co-founder of the business) gives his company a loan of $50,000. Apart from the fact that the financial resources are offered by the owner, this amount will be reflected as a liability. This example shows a clear application of this concept and ensures that the accounting records of different entities are not mixed.

The Dual Aspect Concept

To ensure the sufficiency of transactions and their reliability, it is critical to apply the ideas of the dual aspect concept. In this case, any financial transaction has to be reflected in at least two financial statements simultaneously (Knowledge flow 2014). It could be said that the idea of this principle pertains to the key accounting formula: Assets = Liabilities + Shareholder’s Equity. Keeping both sides in balance implies that some of the transactions have to be recorded twice to reach the equilibrium. For example, the owner of the company invested $50,000 in his/her business. This sum of money will appear in assets, but at the same time, it will result in an increase in shareholder’s equity by $50,000 and has to be also reported under this section.

The Time Interval Concept

In turn, one cannot underrate a critical role in the time period concept in making the accounting reporting concise and relevant. The idea states that the financial reports have to be divided into equal time intervals such as quarters (Kolitz 2016). Using this principle is vital for the financial viability of the company since applying it not only systemises the accounting reports but also helps monitor any financial changes and make appropriate future projections. For example, the companies tend to reflect changes in their financial positions every day, but the accounting period closes at the end of the month.

The Prudence Concept

For the efficient accounting practices, it is necessary to register expenses as soon as possible in the financial statements while the revenues have to be recorded after being realised, and this idea is reflecting in the prudence principle (Knowledge flow 2014).

It is evident that this concept ensures that the revenues are not overestimated, and costs are recorded promptly (Knowledge flow 2014). It assists the enterprise in having a realistic understanding of its finances and mitigating risks associated with bankruptcy. For example, the company paid $30,000 and $50,000 for rent and machinery respectively. Simultaneously, it gained $400,000 in revenues. In this case, it will record expenses first and then report profits.

The Materiality Concept

In addition, it is widely known that financial statements provide important information covering the company’s viability and financial health. In this case, to ensure its relevant interpretation, the materiality principle requires reporting all financial events and transactions that may affect the opinions of investors in any way (Cunningham et al. 2014). In turn, it is apparent that it is not rational to report any insignificant aspects, as they have no influence on the overall performance and financial stability of the organisation.

For example, the company’s factory was destroyed by the earthquake, and the expenses for restoration accounted for $20,000. Its net income was $80,000. In this case, these expenses have to be viewed as a material since $20,000 is 25% of the company’s income, and the investors have to know about it.

The Accruals Concept

Apart from being discussed at the end of the essay, the accruals principle can be regarded as fundamentals of accounting. It implies reflecting revenues and expenses in the period they take place (Ising 2013). Nowadays, many companies operate on credit, and waiting for the cash transaction and recording it after receiving an invoice could be considered as irrational. It will create difficulties when evaluating the financial performance of the firm.

After receiving cash, the organisation reverses the recorded statements and registers cash transfers and transactions. For example, the marketing agency tends to bill its clients monthly, but before that, it performs different services associated with customers’ projects. At the end of the month, it modifies the entries of accrued revenues (on credit). After sending the invoices, it changes these aspects again. In this instance, the expenses correspond to the revenues from the projects and vice versa.

The Going Concern Concept

Lastly, the going concern principle implies that the company will aim at contingency and have enough financial resources to continue its operations in the recent future (Knowledge flow 2014). It could be said that the ideas of amortisation and depreciation suggest that the firm will be financially viable in the long-term, as, otherwise, it will not be able to pay back its liabilities and debts (Knowledge flow 2014).

It is evident that this concept contributes to the development of well-evaluated managerial decisions and future-oriented goals. For example, the international company violated the import regulations and transported some raw materials illegally. The firm lost $100,000 in its inventory and had to pay fines. Nevertheless, due to its international focus and outstanding financial performance, the company can be regarded as a going concern, as these negative consequences will not disrupt its operations.

In the end, it could be said that the essay unveiled the most important insights concerning the significance of accounting concepts and principles. It is apparent that they are employed to provide a universal framework for financial reporting, as, otherwise, it will create confusion. Simultaneously, they help register expenses and revenues in a timely manner to provide a relevant image of the company’s financial health to investors.

Apart from guiding functioning, accounting concepts shape a long-term orientation and imply that the enterprise will continue its operations by making well-evaluated decisions. Overall, it could be said that accounting principles are pivotal since they not only create a framework for reporting but also target at promoting continuity, innovation, effective budgeting, and development.

Reference List

Cunningham, B., Nikolai, L, Bazley, J, Kavanagh, M, Slaughter, G & Simmons, S 2014, Accounting: information for business decisions , Cengage Learning, Melbourne.

Ising, P 2013, Earnings accruals and real activities management around initial public offerings: evidence from specific industries , Springer Science+Business Media, Berlin.

Knowledge flow 2014, Learn accounting , Knowledge flow, New York.

Kolitz, D 2016, Financial accounting: a concepts-based introduction , Routledge, London.

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IvyPanda. (2020, November 12). Accounting Concepts for Financial Reporting. https://ivypanda.com/essays/accounting-concepts-for-financial-reporting/

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essay on accounting framework

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Our Standards are developed by our two standard-setting boards, the International Accounting Standards Board (IASB) and International Sustainability Standards Board (ISSB). 

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essay on accounting framework

IFRS Accounting Standards are developed by the International Accounting Standards Board (IASB). The IASB is an independent standard-setting body within the IFRS Foundation.

IFRS Accounting Standards are, in effect, a global accounting language—companies in more than 140 jurisdictions are required to use them when reporting on their financial health. The IASB is supported by technical staff and a range of advisory bodies.

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essay on accounting framework

IFRS Sustainability Disclosure Standards are developed by the International Sustainability Standards Board (ISSB). The ISSB is an independent standard-setting body within the IFRS Foundation.

IFRS Sustainability Standards are developed to enhance investor-company dialogue so that investors receive decision-useful, globally comparable sustainability-related disclosures that meet their information needs. The ISSB is supported by technical staff and a range of advisory bodies.

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The revised  Conceptual Framework for Financial Reporting (Conceptual Framework)  issued in March 2018 is effective immediately for the International Accounting Standards Board (Board) and the IFRS Interpretations Committee. For companies that use the  Conceptual Framework  to develop accounting policies when no IFRS Standard applies to a particular transaction, the revised  Conceptual Framework  is effective for annual reporting periods beginning on or after 1 January 2020, with earlier application permitted.  

The  Conceptual Framework  sets out the fundamental concepts for financial reporting that guide the Board in developing IFRS Standards. It helps to ensure that the Standards are conceptually consistent and that similar transactions are treated the same way, so as to provide useful information for investors, lenders and other creditors.

The  Conceptual Framework  also assists companies in developing accounting policies when no IFRS Standard applies to a particular transaction, and more broadly, helps stakeholders to understand and interpret the Standards.

The 2018 revised  Conceptual Framework  sets out:

  • the objective of general purpose financial reporting;
  • the qualitative characteristics of useful financial information;
  • a description of the reporting entity and its boundary;
  • definitions of an asset, a liability, equity, income and expenses and guidance supporting these definitions;
  • criteria for including assets and liabilities in financial statements (recognition) and guidance on when to remove them (derecognition);
  • measurement bases and guidance on when to use them;
  • concepts and guidance on presentation and disclosure; and
  • concepts relating to capital and capital maintenance.

Standard history

Conceptual Framework for Financial Reporting  was issued by the International Accounting Standards Board in September 2010. It was revised in March 2018.

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Disclosure Initiative—Definition of Material (Amendments to IAS 1 and IAS 8)

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Updating a Reference to the Conceptual Framework (Amendments to IFRS 3)

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essay on accounting framework

Journal of Materials Chemistry A

Thermomechanical properties of metal-organic framework hkust-1 crystals.

The thermomechanical coupling widely exists in the vitrification and some practical applications of metal-organic frameworks (MOFs). However, the thermomechanical property of MOF crystals still remains almost unexplored. Here, based on the in situ compression tests at elevated temperatures, we find very different mechanical behaviours in the crystalline HKUST-1, a classic MOF, at different temperatures. Above 100 °C, a hyperelastic-plastic deformation is observed, which is ascribed to the partial disintegration of the MOF structure of HKUST-1 as revealed by reactive molecular dynamics simulations. Although the HKUST-1 crystals below 100 °C exhibit the conventional elastic-plastic deformation, the serration behaviour of the plastic flow that is obvious at room temperature disappears at higher temperatures due to the entropic effect. Moreover, both the Young’s modulus and yield strength of the elastic-plastic HKUST-1 below 100 °C significantly decrease with growing temperature, attributed to the aggravation of ligand distortions at high temperatures. The strong dependence of the mechanical behaviours on temperature observed in crystalline HKUST-1 is expected to expand our current understanding of the thermomechanical behaviours of MOF crystals.

  • This article is part of the themed collection: Journal of Materials Chemistry A HOT Papers

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  1. The Importance of the Conceptual Framework for Accounting.

    Essay Writing Service. Conceptual Framework plays an important role in accounting. It is because, Conceptual Framework helps a better understanding of accounting information, for example general purpose financial reports and, in turn, their confidence in IFIs. Furthermore, Conceptual Framework promotes harmonization by giving a basis for ...

  2. The Conceptual Framework in Accounting Essay Example [Free]

    Radical perspective. It is simple to observe and perpetuate the criticism of radical accountants to traditional accounting as compared with Conceptual Framework projects, which are still under use and depend on information excellence like representational faithfulness, reliability, and neutrality among other aspects that suppose an existing objective world.

  3. PDF A Commentary on The Conceptual Framework for Financial Reporting

    the conceptualisation of accounting in the Conceptual Framework. Specifically, the author demonstrates such argument using Searle's (1995) Social Reality Construction Model (SCRM) to gain a better insight into the conceptualisation of accounting by taking into consideration of the multi-dimensional nature of social reality. ...

  4. The Importance of the Conceptual Framework for Accounting

    Essay Writing Service. Conceptual Framework plays an important role in accounting. It is because, Conceptual Framework helps a better understanding of accounting information, for example general purpose financial reports and, in turn, their confidence in IFIs. Furthermore, Conceptual Framework promotes harmonization by giving a basis for ...

  5. Accounting framework definition

    An accounting framework is a published set of criteria that is used to measure, recognize, present, and disclose the information appearing in an entity's financial statements. An organization's financial statements must have been constructed using a recognized framework, or else auditors will not issue a clean audit opinion for them. The most ...

  6. The Project of Conceptual Framework for Financial Accounting: A

    The Financial Accounting Standards Board ("FASB") exploits this basic definition of economics in its "Conceptual Framework" which it extols as "a coherent system of interrelated ...

  7. Nature And Purpose Of The Conceptual Framework Accounting Essay

    Therefore, the accounting conceptual framework must embody a set of qualitative characteristics that ensure financial reporting grants users of economic statements with sufficient information for assessments. The U.S. financial accounting conceptual framework was established between late 1970's and early 1980's.

  8. PDF Conceptual Framework for Financial Reporting

    (b) assist preparers to develop consistent accounting policies when no Standard applies to a particular transaction or other event, or when a Standard allows a choice of accounting policy; and (c) assist all parties to understand and interpret the Standards. The . Conceptual Framework. is not a Standard. Nothing in the . Conceptual Framework

  9. Conceptual framework for financial reporting 2018: a critical review

    Abstract. International Accounting Standard Board (IASB) issued the conceptual framework for financial reporting (hereafter CF) 2018 in September 2018 for a comprehensive guideline for financial ...

  10. IASB Conceptual Framework for Financial Reporting

    The International Accounting Standards Board's (IASB) revised Conceptual Framework does not have a stated effective date and the IASB will start using it immediately from its date of issue on March 29, 2018. Published by the IASB: March 29, 2018. Included in Part I of CPA Canada Handbook: October 2018

  11. Conceptual Framework for Financial Reporting 2018

    April 1989. Framework for the Prepa­ra­tion and Pre­sen­ta­tion of Financial State­ments (the Framework) was approved by the IASC Board. July 1989. Framework was published. April 2001. Framework adopted by the IASB. September 2010. Conceptual Framework for Financial Reporting 2010 approved by the IASB. March 2018.

  12. Development of Conceptual Framework in Accounting

    The conceptual framework must ensure the development of relevant accounting standards which the users can understand. However, in developing conceptual framework the standard setters need to be mindful of the fact that organisational practices and market conditions will evolve, and the standards need to evolve in order to remain relevant.

  13. IASB publishes revised Conceptual Framework

    The International Accounting Standards Board (IASB) has published its revised 'Conceptual Framework for Financial Reporting'. Included are revised definitions of an asset and a liability as well as new guidance on measurement and derecognition, presentation and disclosure. The new Conceptual Framework does not constitute a substantial revision of the document as was originally intended when ...

  14. 2.4: The Conceptual Framework

    The conceptual framework used for private enterprises is very similar in content, although the structure, terminology, and emphasis differ slightly. We will focus on the IASB framework, which is located in Part 1 of the CPA Canada Handbook. 2.4: The Conceptual Framework is shared under a not declared license and was authored, remixed, and/or ...

  15. Accounting Concepts for Financial Reporting Essay

    For instance, the owner (co-founder of the business) gives his company a loan of $50,000. Apart from the fact that the financial resources are offered by the owner, this amount will be reflected as a liability. This example shows a clear application of this concept and ensures that the accounting records of different entities are not mixed.

  16. IFRS

    The revised Conceptual Framework for Financial Reporting was issued by the IASB in March 2018 and is effective immediately for the IASB and the IFRS Interpretations Committee.For companies that use the Conceptual Framework to develop accounting policies when no IFRS Accounting Standard applies to a particular transaction, the revised Conceptual Framework is effective for annual reporting ...

  17. Developing Conceptual Framework in Accounting

    Financial accounting theory was created as the principle in making standards, and conceptual framework for accounting built up. This essay is going to talk about whether developing a conceptual framework is an impossible possibility. In order to talk about this, I am going through some history of accounting, the definition and compare the ...

  18. Concepts Statement No. 8, Conceptual Framework for Financial ...

    P2. In January 2014, the FASB reactivated its Conceptual Framework project. This proposed Concepts Statement, which would become Chapter 2 of Concepts Statement 8, describes a reporting entity. Authoritative Status of the Conceptual Framework P3. Paragraph 105-10-05-3 of the FASB Accounting Standards Codification®

  19. Financial Accounting Standards Board Framework Analysis

    Essay Writing Service. The Financial Accounting Standards Board (FASB) has been criticized for not requiring firms to report information that is interpretable and useful for financial statements users (CICA, 1980). The FASB's conceptual framework is the core in which all accounting standards are derived.

  20. Conceptual Framework And Why Is It Needed Accounting Essay

    The forth conceptual framework attempt discussed is the conceptual framework established by the Financial Accounting Standard Board (FASB). It is established in response to the criticisms of the profession's standard setting and was subject to the onus of demonstrating its authority and legitimacy to set standards.

  21. IFRS

    The revised Conceptual Framework for Financial Reporting (Conceptual Framework) issued in March 2018 is effective immediately for the International Accounting Standards Board (Board) and the IFRS Interpretations Committee.For companies that use the Conceptual Framework to develop accounting policies when no IFRS Standard applies to a particular transaction, the revised Conceptual Framework is ...

  22. Essay Framework

    Essay Accounting The conceptual framework for accounting is a report of rules which demonstrate commonly established guidance for the evolvement of new reporting practices and for improvement of the already existing ones. The most recognisable and frequently used conceptual framework is invented in 1989 by the International Accounting Standards ...

  23. Getting Ready for the New SEC Climate Disclosure Rule

    From 2013 to 2014 Laura was a partner in Deloitte's National Office Accounting Consultation Group. From 2011 to 2013, Laura was a Professional Accounting Fellow in the Office of the Chief Accountant of the Securities and Exchange Commission, where she consulted with registrants and the Division of Corporation Finance on accounting and ...

  24. The ECB's Future Monetary Policy Operational Framework ...

    This paper reviews the trade-offs involved in the choice of the ECB's monetary policy operational framework. As long as the ECB's supply of reserves remains well in excess of the banks' demand, the ECB will likely continue to employ a floor system for implementing the target interest rate in money markets. Once the supply of reserves declines and approaches the steep part of the reserves ...

  25. Thermomechanical properties of metal-organic framework HKUST-1 crystals

    The thermomechanical coupling widely exists in the vitrification and some practical applications of metal-organic frameworks (MOFs). However, the thermomechanical property of MOF crystals still remains almost unexplored. Here, based on the in situ compression tests at elevated temperatures, we find very diff Journal of Materials Chemistry A HOT Papers