1. Conceptual Framework of Accounting
FINANCIAL REPORTING
Conceptual Framework of Accounting
SONGJINGJIN

2. Introduction
IFRSs are designed to apply to the general purpose financial statements and other financial reporting of all profit-orientated entities. Therefore, except in very rare circumstances, entities must follow them to give a fair presentation. Non‑compliance may lead to a modified auditor’s report.

3. Introduction
The International Accounting Standards Board (IASB) sets the standards.

4. GAAP and conceptual framework
 a statement of generally accepted theoretical principles, which form the frame of reference for a financial reporting.

5. GAAP and conceptual framework
International Financial Reporting Standards (IFRS)
International Accounting Standards (IAS)
Exposure Drafts
SIC/IFRIC pronouncements

6. The IASB The standard setting process
(a) IASB staff prepare an issues paper including studying the approach of national standards setters.
(b) The SAC is consulted about the advisability of adding the topic to the IASB’s agenda.:

7. The IASB
(c) A Discussion Document may be published for public comment.
(d) An Exposure Draft is published for public comment.
(e) After considering all comments received, an IFRS is approved by at least 8 votes (of 14) of the IASB. The final standard includes both a basis for conclusions and any dissenting opinions.

8. Advantages and disadvantages of accounting standards
(a) They reduce or eliminate confusing variations in the methods used to prepare accounts.
(b) They provide a focal point for debate and discussions about accounting practice.

9. Advantages and disadvantages of accounting standards
(c) They oblige companies to disclose the accounting policies used in the preparation of accounts.
(d) They are a less rigid alternative to enforcing conformity by means of legislation.
(e) They may oblige companies to disclose more accounting information than is required by national legislation itself.

10. Advantages and disadvantages of accounting standards
(a) A set of rules which give backing to one method of preparing accounts might be inappropriate in some circumstances.
(b) Standards may be subject to lobbying or government pressure.

11. Advantages and disadvantages of accounting standards
(c) There may be a trend towards rigidity, and away from flexibility in applying the rules.
(d) More than one standard accounting practice may be considered appropriate. Such a situation is not really narrowing variety of treatments sufficiently.

12. LO 3 Explain the need for high-quality standards.

13. Conceptual Framework of Accounting
(1)Objectives
of Financial
Reporting
(2)Qualitative
Characteristics
of Information
Accounting
(3)Elements
of Financial
Statements
(4)Recognition and Measurement Concepts
Assumptions
Principles
Constraints

14. Thank you!