Presentation on Conceptual Framework
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This document discusses the conceptual framework for financial reporting. It provides an introduction to the group members and then discusses key aspects of the conceptual framework including: 1. The definition, necessity, and objectives of a conceptual framework 2. The history of developing conceptual frameworks including key documents from FASB and IASB 3. Key elements of financial reporting like assets, liabilities, income, and equity 4. Qualitative characteristics that enhance financial reporting such as comparability, verifiability, timeliness, and understandability.
Presentation on Conceptual Framework
- 3. GROUP MEMBERS Introduction ID 22-015 22-059 22-122 22-220 22-254 Anamika Hore Sagufta Bushra Mishma Tahera Irin Afrn Nadia Chowdhury Riya
- 5. What is conceptual framework? A coherent system of interrelated objectives and fundamentals that is expected to lead to consistent standards and that prescribes the nature function and limits of financial accounting and statement. (FASB) Conceptual Framework attempts to provide a theory of financial accounting to make it quite structured. A system of ideas and objectives that lead to the creation of a consistent set of rules and standards.
- 6. Necessity of Conceptual Framework To remove inconsistency To have a basis for adaption of ne rules. To remove to have a general theory accounting disputes . To have a better understanding of financial information To enable third parties to take decision
- 7. Objectives of Conceptual Framework 1.To provide useful information. 2.To provide relevant information 3.To ensure the validity of information. 4.To provide material information
- 8. April 1989 Framework for the preparation and presentation of financial statements was approved by the IASC board. July 1989 Framework was published . Aril 2001 Framework adapted by IASB September 2010 Conceptual framework for financial reporting 2010, approved by the IASB March 2018 Conceptual framework for 2018 published History of Conceptual Framework
- 9. History of Conceptual Framework (Continuing) 1987-2000: FASB issued 7 concept statements covering the following topics:- 1)Objectives of financial reporting by business enterprises and non-profit organizations 2)Qualitative characteristics of useful accounting information. 3)Elements of financial statements 4)Criteria for recognizing and measuring the elements. 5)Use of cash flow and present value information in accounting measure.
- 10. 1st Stage (The ‘Why’ purpose of accounting) 2nd Stage 3rd Stage (The ‘How’ implementation)
- 11. A reporting entity is an entity where it is reasonable to expect that there are users dependent on a General Purpose Financial Report (GPFR) to gain an understanding of the financial position and performance of the entity, and to make decisions based on this financial information and other information contained in the financial report. These users could be shareholders, members, employees, creditors, lenders or potential investors. The Definition Of Reporting Entity
- 12. Users Of Financial Report
- 13. Objectives STEWARDSHIP The acceptance of responsibility to look after , or safeguard the assets, or entitlements of identified parties Decision Usefulness The aim of providing accounting information so as to assist readers to make informed resource collection decisions Going Concern A business that functions without the threat of liquidation for the foreseeable future. Objectives Of General Purpose Financial Reporting
- 14. Elements of Financial Reporting (According to the IASB conceptual Framework) 1)ASSSET 2)LIABILITIES 3)EXPENSE4) INCOME 5) EQUITY
- 15. Key Characteristics Of Assets:- 1) There must be a future economic benefit. 2) The reporting entity must control the future economic benefits. 3) The transactions or other events giving rise to the reporting entities control over the future economic benefits must have occurred
- 16. Key Characteristics of Liabilities:- 1) There must be an expected future disposition of economic benefits to other entities. 2) There must be a present obligation. 3) A past transactions or other events must have created the obligation.
- 17. Qualitative Characteristics of Financial Report