The International Accounting Standards Board

Boundless (2015) said that a Conceptual Framework can be defined as a system of concepts and purposes that guide to the creation of a constant set of regulations and standards. Especially in accounting, the rule and standards set by the nature, function and limit of financial accounting and financial statements. IFRS(2015) stated that the purpose of the Conceptual framework is to enhance financial reporting and objective of accounting by offering a more accomplish, clear and updated set of concepts or guidelines. In Conceptual Framework, it will form a basis for define how transactions should be calculated (historical value or market value) and reported in financial report like how they are presented or communicated to internal or external users. To carry out this, the International Accounting Standards Board (IASB) is establishing on the currently existing Conceptual Framework updating it, enhancing it and padding it in the disparity instead of essentially reconsidering all respects of the Conceptual Framework.

The conceptual framework was established by the Financial Accounting Standards Board (FASB) and is used to help define the boundaries of accounting. It gives definitions of key terms and establishes consistent standards by which fundamental issues are defined. This makes it easier to facilitate discussion and leads to greater efficiency in making accounting judgments.

The concepts in the conceptual framework are being created in an orderly manner which makes the financial reporting consistent and logical. There is also increased comparability of standards from company to company or from year to year. The conceptual framework also ensures that there is consistency internally in the accounting standards. In addition the framework also establishes precise definitions that facilitate discussion of accounting issues and it also helps preparers and auditors in resolving financial problems in the absence of an accounting standard. Since a theory of accounting that can be applied on specific problems is provided in the conceptual framework, the volume of accounting standards is

According to ACCA[2014], a conceptual frame work must “consider the theoretical and conceptual issues surrounding financial reporting and form a coherent and consistent foundation that will underpin the development of accounting standards”[ACCA, 2014]. This definition incorporates the IASB and FASB definition of conceptual framework. So in other words, conceptual framework forms the

Before 2001, none of the major economies in the world requires the use of International Financial Reporting Standards (IFRS). However, since IFRS was adopted and required by the European Union (EU), IFRS is currently the most widely shared set of accounting standards with its application required or permitted by approximately 120 countries as indicated by the IFRS Resources (2015). IFRS, perceived as “a single set of high-quality, understandable and enforceable accounting standards” (IASB, 2007, p.4), shows its prevalence all around the world. Nevertheless, there are still some opponents against such harmonization. “The likelihood that any U.S. company will be forced to switch from using today’s version of U.S. Generally Accepted Accounting Principles (GAAP) to using today’s version of IFRS is absolutely zero”(2010), said the specialist in corporate financial reporting, Bruce Pounder, doubting the possibility of eliminating differences between IFRS and U.S. GAAP, not to mention sharing a single set of accounting standards in all countries.

In 2001, IASC was replaced by IASB as the board for setting these standards. This board consist of 14 experts having recent practical experience in setting accounting standards. They bought in the strategic working party, which took a new look at IASC’s structure. IASB bought in many structural changes. But one of the most notable change among that was replacing the part-time volunteer board with full-time member. The four main objective of IASB are

At the moment nearly more than 100 countries comply with the IASB standards. Moreover the board is also responsible for the International Financial Reporting standards (Ready ratios, 2010). The process for setting these standards comprises of certain stages such as: setting the agenda, planning, developing the discussion paper and exposure draft and finally setting the standard. After issuing the standards the board members hold meetings to discuss and review whether there are any issues regarding its implementation (Foley,2004).

There are many different types of accounting standards and principles in the business world. It would be difficult for financial markets to operate and compare reports with these different various standards. Therefore, the International Accounting Stands Board have developed a new way of reporting financial information. The International Financial Reporting Standards (IFRS) foundation and the International Accounting Standards Board (IASB) were established in 2001 in order to develop a set of high quality and acceptable financial accounting standards. ("IFRS - Organisation history", 2016). The aim of this report is to firstly summarise the significant changes in the Australian Accounting Standards Board (AASB 15) and how they address perceived deficiencies in the current standards. Then, it will highlight the future implications of adopting the AASB 15 for Australian companies.

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

This report is intended to discuss the significance of the IASB’s Conceptual Framework. It will layout the basis of the Conceptual Framework and then discuss its significance and relevance with regards to previous and future accounting industry standards.

By definition, the conceptual framework is a model whereby it outlines the standardised measures that need to be taken when institutions and firms publish financial statements for the users of the accounts. This essay will portray and evaluate whether or not the conceptual framework succeeds in improving understanding of financial statements by using EasyJet as an example in addition to explaining how it benefits the users of the accounts.

The IASB Conceptual Framework is a framework developed by the International Accounting Standards Board (IASB). In a nutshell, what this framework does is to lay out the concepts needed for accurate preparation and presentation of financial statements to external users such as auditors, tax authorities, investors, regulatory authorities and so on. According to the IASB, the Conceptual Framework for Financial Reporting does the following;

Step five, is developing and publishing the standard. After all comments are received on the draft, the IASB will consider revising or not. When considering revising the IASB will check for substantial issues that emerge during the comment period on the exposure draft that it had not previously considered. They assess the evidence that has considered. They evaluate if they have fully understood the issues and have made sure the people views are on the same issues. The IASB considers the different view points in the draft and to make sure they have been reviewed in the correct context for its conclusions (International Accounting Standards Board, n.d.)

The conceptual framework is used to outline potential courses of action or to present an ideal approach to an idea or thought. The framework describes basic concepts that underline the preparation and presentation of financial statements for external users. Qualitative characteristics of financial information are discussed in the conceptual framework of the standard setter, to whose work they are essential. If financial information is to be useful, it must be relevant and faithfully represent what it purports to represent.

In the following question conceptual framework will be examined, firstly the critical definition and format of conceptual framework will be reviewed. Which is then follow by its general benefit and limitation of this method. Secondly the limitation and benefit of a single framework in developing accounting standard is discussed in relation to their economy culture and language. Finally there will be a summarise answer to the question above