The Conceptual Framework Of Financial Information

The conceptual framework is an attempt to provide a metatheoretical structure for financial accounting. SFAC No.3 defines 10 elements of financial statements. It is obviously a resolution of the definitions presented in the discussion mem for the conceptual framework project. Elements are what accounting professionals measure and the attributes is about how to measure. Definitions can be helpful to the financial statements which have been formulated in order to help professionals to specify the qualification are. Also, the definitions must be expressed in the metatheoretical structure.

As stated in the AASB Framework, financial statements play an utmost important role to a variety of users, which mainly consist of the investors, employees, lenders, suppliers and other trade creditors, customers, governments and their agencies, as well as the public, in making vital financial decisions. For accounting information to be ‘decision useful' to this groups of people, the financial information

As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the

IASB. 2010, "The Conceptual Framework for Financial Reporting" IFRS, pp. A21- A38, viewed 23 April 2014,

Customers: They are the people who shop and regularly visit the company. They assess the financial position of its suppliers which is necessary for them to maintain a stable source of supply in the long term.

Main Features of this Pronouncement Application Date This pronouncement makes amendments to the Framework for periods ending on or after 20 December 2013, with allowance for earlier application. AASB CF 2013-1 4 PREFACE  Main Amendments This pronouncement replaces the guidance in the Framework on the objective of general purpose financial reporting and the qualitative characteristics of useful financial information with, as an integral part of the Framework, the Appendix: Objective and Qualitative Characteristics.

The country selected for this study is the United Kingdom (UK). UK Generally Accepted Accounting Practice (GAAP) has been in place for a long period of time and was harmonized in 2005 so as to comply with the international accounting standards. The UK embraced the principles of the International Financial Reporting Standards (IFRS) in 2005 after the European Union (EU) mandated that all members that were publicly listed companies be subject to reporting under the International Accounting Standards (IAS). This was to help facilitate that those listed companies could easily be compared to onr other on their performance and transparency was improved since they were now subject to the same principles of reporting. Companies in the United

Financial Accounting Standards Board (FASB) is a seven member board that consists of accounting professionals who establishes and communicates financial accounting and reporting standards known as generally accepted accounting principles (GAAP) in United States. The standards’ quest is to govern the preparation of the corporate financial reports and hence ensuring transparency, credibility and understandability of the financial statements. To achieve these, there is need to set guidelines that create uniformity in the preparation of the statements across the region. In this paper, we will focus on the

This essay firstly discusses the potential reasons of the standard constitutor to believe that provision of segmental information is useful. Secondly, it states the current requirement to the operating segment in IFRS 8 and the differences from other past and present accounting standards. Thirdly, the essay discusses the evidences that show the present requirement will raise the available information quality to financial statement users.

With complete notion and awareness of how each country has their set of rules, “the goal of IFRS is to provide a global framework for how public companies prepare and disclose their financial statements” (Rouse, 2011). This view is meant to provide general guidelines, as well as international comparisons through conventional and edifying means. To bring broader and vivid objectives, IFRS replaced IAS, the older standards, in order to bring a more comprehensive and simplified accounting procedures.

The main purpose of financial reporting is to deliver transparent financial information regarding a company to the investors and general public. The financial crisis of 2008 had shown that absence of transparency in the financial statements may have an adverse effect on investor confidence. High quality accounting information is an essential criterion for well- functioning economy as investors rely on this information for investment purposes. Value relevance is thus one of the basic attributes of accounting quality. (Francis et al. 2004)

This article aims at addressing an audience which is comprised of a board member and senior staff of the IASB, setters from the National Accounting Standards and the article is also meant to be published in the IASB website, where those in accounting and business can be critic to it. The paper will define what the framework for the preparation and presentation of financial statements is, and there will be intense discussion of the role of the framework. The framework's criticisms will also be focused on to clarify on the efficiency of a constitution. Inconsistencies and internal logical errors will be discussed, with regards to the conceptualization of an accounting constitution. Recommendations and suggestions will then be made based on the findings of research.

It is essential that the information provided in financial statements is readily understandable by users. Users are assumed to have a reasonable knowledge of business and economic activities and accounting, and a willingness to study the information with reasonable diligence. Also information has the quality of relevance when it influences the economic decisions of users by helping them evaluate past present and future events or confirming or correcting the past evaluations. Information is material and it depends on the size of the item or error judge in the particular circumstance of its omission or misstatement. The IASB framework takes the view that materiality is a cut off point whether information is important to the users. If information must be relevant but so unreliable that it could be misleading so the information must be reliable. Information has the quality of reliability when it is free from material error and bias.

Accounting as a profession or discipline, has always been seen as an information-generating one, which fittingly makes the job of the Accountant to be that of observing economic activities, recording the observations in the prescribed books, analysing the recordings, interpreting his analysis and preparing reports to all users of Accounting Information. The prepared reports are generally referred to as financial statements, which clearly outline or identify the areas of strengths and weaknesses of a business organisation. Various interest groups use the generated Accounting Information in the financial statements as input or guide towards the making of effective decisions

To be useful, financial information must be relevant and give a true picture of what it purports to represent. The usefulness of financial information is enhanced when it is comparable, verifiable, understandable and quickly disseminated. The ED does not properly address the informational needs of resource provider for NFP entities. PWC (2014) mentioned in its comment letter to the ED that the proposed draft does not “describe the additional principles or concepts that may be important to NFP contributors.” Consequently, the information presented may be too broad and not relevant to users.