StudentShare solutions
Triangle menu

Conceptual Framework: Financial Reporting - Essay Example

Extract of sample
Conceptual Framework: Financial Reporting

The Conceptual Framework for Financial Accounting Accounting is at the core of business finance, and with the dynamic developments of the global economics, this subject has also become a key area of research and analysis. In this situation, even the most basic accounting concepts like assets, liabilities, revenue, debt, etc. are of critical importance. Terms based on the accounting concepts need to be refined, and if necessary, redefined to suite the requirements of modern financial accounting. FASB has declared 7 pronouncements (6 of which are extant) termed as Statements of Financial Accounting Concepts (CON) in a serial design to constitute a common base of financial accounting and reporting standards. This conceptual framework has been formed to prescribe the boundaries, functions and characteristics of financial accounting. This will provide consistent standards for all global financial systems. (Epstein & Saafir, 2010) The Conceptual Framework Project (CFP) undertaken by FASB is actually targeted to develop principles or wider qualitative standards to allow the selection of rational and systematic options among alternative methods of financial reporting (Schroeder, Clark, & Cathey, 2010). The need of a similar synchronized framework is being strongly felt among the accounting experts globally, including the regions like EU, India, Australia, etc. (Holder, 2011) (Gupata, 2008) (Schipper, 2005) Hence, FASB together with IASB is moving towards creating a conceptual framework that would cater to the international accounting needs. “The new framework builds on existing IASB and FASB frameworks. The IASB has revised portions of its framework; while the FASB has issued ‘Concepts Statement 8’ to replace ‘Concepts Statements 1 and 2’. This first phase of the conceptual framework deals with the objective and qualitative characteristics of financial reporting” (IFRS Foundation, 2010). Usefulness of the Framework The conceptual framework will create a base for the organization of financial statements. This will help the preparers to apply accounting standards, auditors to form analytical opinions, and general users to understand accounting principles comprehensively (Gupata, 2008). Further, as defined by M.S. Armstrong (the first chairman of FASB), “The conceptual framework project will lead to definitive pronouncements on which the Board intends to rely in establishing financial accounting and reporting standards.” (Carmichael, Whittington, & Graham, 2007, p. 46) Although such a framework does not give an intricate system full of directives to regulate the interpretation of almost all sorts of accounting facts and figures, it determines the boundaries for understanding the preparation of financial statements so that confusions and contradictions can be totally eradicated. The framework is supposed to increase public confidence in the financial statements and contextual systems; thereby it will help to bring the different existing accounting methods on a common, homogenous platform. Moreover, the conceptual framework also addresses the issue of disaggregation in financial stateme ...Show more

Summary

Running Head: CONCEPTUAL FRAMEWORK Conceptual Framework University Name Subject Name Instructor Name Conceptual Framework Introduction The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) are working together to develop a robust conceptual framework for the purpose of financial accounting and reporting…
Author : flatleybeaulah
Conceptual Framework: Financial Reporting essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Conceptual Framework: Financial Reporting"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

IASB improved conceptual framework for financial reporting
If a company complies with the international accounting standard, it will likely achieve a faithful representation of its financial performance; as well as it will provide the basis for analysis of the company’s position on the global market and further prospects for development of its business.
12 pages (3000 words) Essay
Conceptual framework for financial reporting
The concept of the conceptual framework can be regarded as recent in the field of business and accounting. In the past, people involved in the setting of accounting standards used to operate in the absence of conceptual frameworks. .
5 pages (1250 words) Essay
Conceptual Framework
The determination of conceptual framework projects' success parameters is necessarily based on the fact that they depend on a set of prior defined variables. Since variables are subject to change over the total duration of the project it's possible that CF projects would still be continued without abatement despite their above average failure rate, in some instances almost amounting to 92%.
10 pages (2500 words) Essay
I need an introduction and conclusion for my essay ( accounting conceptual framework for financial reporting)
The assets- liability approach of the conceptual framework adopted by IASB for designing international accounting standards, which is akin to the purposes of the framework implemented by FASB, has been explored in
2 pages (500 words) Essay
Conceptual framework
The FS should be understandable, relevant, reliable, timely, and comparable. The framework must be the basis of a general purpose of FS that could be presented to a wide range of
6 pages (1500 words) Essay
Regulatory and Conceptual Framework
The adoption of the international accounting standards has both advantages and disadvantages to associated companies. First, the adoption has a cost
3 pages (750 words) Essay
The IASB Conceptual Framework for Financial Reporting (the Conceptual Framework) sets out the concepts that underlie the preparation and presentation of financial statements. According to Hines (1980), the ontological assumption underpinning the
This also increased the risk of development of mutually inconsistent standards that violated the main objective behind preparation of financial statements. To meet the need of robustness and consistency in the financial statements, the conceptual framework was
8 pages (2000 words) Essay
FINANCIAL REPORTING & ANALYSIS / IASB Conceptual Framework for Financial Reporting
For that reason, any accounting conceptual framework, if properly adhered to, ought to reflect lists of qualitative characteristics that make sure financial reporting is provided to users with sufficient
8 pages (2000 words) Essay
FINANCIAL REPORTING & ANALYSIS of IASB Conceptual Framework for Financial Reporting
The reaction towards the issues arising due to the defect in the conceptual framework is reactive in nature rather than proactive. Therefore the lack of proper and standard conceptual framework has increased the risk of inconsistency in the standard with each other and
7 pages (1750 words) Essay
Financial Reporting
Framework is that the relationship between financial accounting and economic reality is unidirectional, reflecting or faithfully reproducing relationship”, which presupposes that “economic reality exists objectively, intersubjectively, concretely and independently of
8 pages (2000 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Click to create a comment
Contact Us