Accounting Conceptual Frameworks

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Accounting conceptual framework
There are a lot of purposes of an accounting conceptual framework. The main purpose of financial reporting under this accounting conceptual framework is not to help management to make decisions, or calculate taxable income and etc. (Alexander & Nobes, 2007) However, the purpose of accounting conceptual framework is act as a framework for setting accounting standards. It act as a guideline to the Board in developing accounting standards , yet is also as a guide to resolving accounting issues which is not stated directly in an International Accounting Standard or International Financial Reporting Standard or Interpretation. Besides, according to Arnold & Hope the purpose of conceptual
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The information in the financial statement should be easily understandable for the internal users and the external user. The users of financial statements are assumed to have some business, economic and accounting knowledge and able to study the information properly. According to BPP, complex matters should not be left out of financial statement simply due to its difficulty if is relevant information. Therefore, relevant information should not be excluded due to it is too complex or to difficult for users to understand and the framework should include the presumptions on the capabilities of financial statements users and also the capability of financial statement preparers and auditors. (IASB.ORG, 2005)
Lastly, comparability is also one of the qualitative characteristic of financial information. This is because, users use the data in financial statement to make decision therefore it is important that whether the information is comparable or not. It needs to enables the users to identify the similarity and differences between economic phenomena. Besides that corresponding information for previous period should be shown in order to compare over the time. For example, for the use of internal users they could take last year profit and compare with this year profit to make future decision investment for next year.
It is better for accounting profession having agreed accounting standards as a basis for preparing financial statements. This is
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