Conceptual Framework For Financial Reporting

Before deciding to fully adopt IFRSS, in 1996, the AASB issued Policy Statement 6 International Harmonization Policy with objective to ‘pursue the

In 2008, the Securities and Exchange Commission (SEC) issued a road map for the United States (US) to implement International Financial Reporting Standards (IFRS) that would eventually lead to the dissolution of US Generally Accepted Accounting Principles (US GAAP) (Cox 2008). US GAAP is rules based system of accounting that contains over 25,000 detailed pages of guidance, whereas IFRS is a principles based system of accounting that contains 2,500 pages of guidance. IFRS allows accountants to exercise professional judgment when making many decisions. This paper will compare and contrast US GAAP with IFRS on Intermediate Accounting Topics.

Being important to the discipline of accounting, the objectives of IFRS and IAS are to give guidance on the presentation of financial statements. IFRS as

One purpose of financial reporting is to provide information that is useful in making business and economic decisions for internal and external users. The measurement plays a vital role in preparing a reliable and fair report cause it determines how the report shows the entity’s financial position and performance.

The FASB follows a due process in establishing a typical FASB Statement of Financial Accounting Standards. The following steps are usually taken: (1) A topic or project is identified and placed on the Board’s agenda. (2) A task force of experts from various sectors is assembled to define problems, issues, and alternatives related to the topic. (3) Research and analysis are conducted by the FASB technical staff. (4) A preliminary views document is drafted and released. (5) A public hearing is often held, usually 60 days after the release of the preliminary views. (6) The Board analyzes and evaluates the public response. (7) The Board deliberates on the issues and prepares an exposure draft for release. (8) After a 30-day (minimum) exposure period for public comment, the Board evaluates all of the responses received. (9) A committee studies the exposure draft in relation to the public

The International Financial Reporting Standards (IFRS) Foundation and the International Accounting Standards Board (IASB) are a global language for business affairs that was established in 2001 in order to develop a single set high quality and globally accepted reporting standards. ("IFRS - Organisation history", 2016). The point of the IFRS was main stability and transparency in the

International Accounting Standard Board (IASB) is a professional body that develops and approves International Financial Reporting Standards (IFRSs). The IASB is known as an independent and a private sector organizational. IASB was formed to replace the International Accounting Standard Committee. The IASB organization is responsible for all technical matters of the IFRS Foundation that includes ‘full discretion in developing and pursuing its technical agenda, subject to certain consultation requirements with the Trustee and the public, the preparation and issuing of IFRSs (other than interpretations) and exposure drafts, following the due process stipulated in the Constitution, and the approval and issuing of Interpretations developed by

The International Financial Reporting Standards (IFRS) - the bookkeeping standard employed by organizations in more than 110 countries has some key contrasts from the U.S. sound accounting guidelines (GAAP). At the reasonably level, IFRS is viewed as all the more of an accounting standard which is based on principles as opposed to U.S. GAAP which is viewed as a standard based on rules. IFRS, ostensibly, incorporates and displays the financial aspects of a transaction better than U.S. GAAP.

The objective of a general purpose financial report is to deliver financial information about the reporting entity. Decisions about equity and debt instruments depend on the returns that they expect from an investment in those instruments. To assess an entity’s prospects for future net cash inflows information is needed about several aspects of the entity including but not limiting to, resources of the entity and claims against the entity. General purpose financial reports do not provide all the information needed for users, thus this information needs to be gathered from other sources such as general economic decisions. General purpose financial reports are not intended to show the value of a reporting entity. Knowledge about the nature and amounts of a reporting entity’s economic resources is used to assist users identify strengths and weaknesses within a reporting entity. Accrual accounting is

The objective of The Disclosure Initiative: Principles of Disclosure project “is to improve existing guidance in IFRS Standards that helps entities determine the basic structure and content of a complete set of financial statements.” The goal is to establish a Disclosure Standard that unifies and “improves the principles for determining the basic structure and content of the

Reviewers are response the feedback whether the draft document is clear and reflects the decisions issued by the IASB.

A conceptual framework comprises of a set of basic principles that give general support and can assist with detailed decisions by increasing the like hood of consistency and reducing the cost of analysis. In financial reporting, a conceptual framework sets out the concepts that underlie the preparation and presentation of financial

A conceptual framework can be considered as a normative accounting theory. Relying on the various assumptions about the types or associates with the information useful for decision making. It directs in interest of what

IASB aims to develop in the public interest by setting a high quality accounting standards which are understandable and enforceable worldwide. The accounting standard is transparent and comparable information in the financial statements. IASB also operate to work actively with the national standard setters to bring union of national accounting standards and International Financial Reporting Standards (IFRS). These aims are set based on the consideration on providing important, reliable information which is easily accessible by the users of the IAS and to look for future development in the quality of the standards to restrain resources. In the consideration process, the staffs of the IASB are asked to identify, review and raise issues that might warrant the IASB’s attention. (IFRS, 2014, Online)

The objectives of financial reporting are that it should provide information about the financial position, performance