Tute 2 Solutions Acc1030 S2 2014

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.

IASB standard-setters are expecting to develop high quality, scrutable and enforceable world wide accounting standards that would require companies to provide high quality, transparent and comparable information for the users who may participate in the world’s capital markets. IASB has done greatly well. Take some standards as an instance, asymmetric timeliness make bad news and good news be involved timelier in the financial statements. The crucial factors of quality formerly be treated as relevance and reliability, however, there are less focuses on reliability recently by IASB and FASB. Ray Ball believed the reason of this situation is because a failure to differentiate reliability that is the result of managerial manipulation from reliability that is intrinsic in

Research and compare the role of AASB both before and after the changes referred to the above.

These areas have been underlined, as well as the accounting regulations, due to the economic difficulty that has been experienced and for the IASB to take a course of action to try re-gaining the trust of investors and large organisations. The amendments made by the IASB consist of: impairments, connecting gaps involving different accounting standards which apply to similar circumstances, financial instruments, changes in the area of consolidation, derecognizing, and improving the accounting for the off balance sheet items (IASB, 2009). ). The issue of bridging the gap between accounting standards has gone through some transition. Initially accounting regulations were able to use various techniques, in which increased the difficulty of compatibility. This was highlighted by the European Unions request for changes in re-classifying financial assets, analogous to the stance taken in the US, namely the Generally Accepted Accounting Policies (IAS)

In the early 70s, the International Accounting Standards Committee (IASC) was born. The priority of the IASC was to improve comparability of financial statements on an international level. It then changed its name to the International Accounting Standards Board (IASB). The main aim of the IASB is not too dissimilar from the IASC ‘... to develop a single set of high quality,

…the context of the formulation and adoption of international accounting standards mainly includes the following factors: civil society with the rule of law, corporate governance with the ability of continually rectifying deficiencies, capital market enhancing transparency and accountability, independent accounting profession with high standard, and so forth; these factors make up an indivisible whole. (Sun, 2011, p. 31)

General Accepted Accounting Principles, (GAAP) can be defined as the common set of accounting rules, standards and protocols, set by policy boards, which financial institutions and other companies use to assemble their financial statements. On the other hand, International Accounting Standards Board develops and maintains the International Financial Reporting Standards, which is a single set of accounting standards set aside with the aim of being applied internationally. As an accounting standard used in a number of countries across the world, IFRS have proven to be more effective in the representation of economics of transaction more than GAAP since it is based on principles rather than rules (Bellandi, 2012).

The international financial accounting standards is a non for profit private sector. Their aim is to serve the public interests. With the growing globalisation of business and finance, it has stimulated a standardisation of accounting standards among countries. This measure aims to

The International Accounting Standards Boards (IASB) and the Financial Accounting Standards Board (FASB) are making an effort to converge to develop International Financial Reporting Standards (IFRS) by gathering accounting standards that can be used in financial reporting whether it is in the home country or in the host country. Both the International Accounting Standards Board and the US FASB have proven to be vital promoters of the globalization of international financial accounting standards (Kirsch, 2012). These efforts have focused on a cohesive setting that will eliminate the controversy that revolves around accounting standards. I will present to you the facts and differences between the two, state the facts and identify

1C The elements of this infrastructure are high quality accounting setters and auditing standards, effective controls of worldwide audit firms, profession-wide quality assurance and an active regulation authority.

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

There been conflict in most western countries between private sector bodies and the governmental bodies concerning the process of establishing regulatory arrangements required for setting accounting standards (Hopwood et.al 2005). The recent changes by the Australian Federal Government regarding the structure of setting the accounting standards show a huge shift in power to the government from the professional bodies. Majority of the users of financial reports often try to influence the accounting standard with the aim of protecting their own interests. Standard setters in Australia are having

A conceptual framework is a statement of generally accepted theoretical practices which form the base of reference for financial reporting.

The IASB Conceptual framework for Financial Reporting (the ‘Conceptual Framework’) with its accounting standards becomes important for the reason that the business is more complex, and there are various definitions of accounting information in different countries. In this essay, for the first part, it would be discussed whether the conceptual framework is beneficial or not to the development of International accounting standards with several examples. For the second part, it would be also examined that IASB framework with its accounting standards is developed from country to country, and there are differences which have also been caused by a variety of economic, cultural as well as linguistic circumstances.

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