Scribd
Upload
2 views2 pages

Topic Explnation

The Conceptual Framework issued by the IASB outlines the principles for developing and applying IFRS Accounting Standards, aiding in the creation of consistent accounting standards and helping users interpret financial statements. Its main objective is to provide useful financial information for decision-making by investors, lenders, and creditors. Consistency in accounting policies enhances comparability, trend identification, and the reliability of financial information.

Uploaded by

maheshbhusal145
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
2 views2 pages

Topic Explnation

The Conceptual Framework issued by the IASB outlines the principles for developing and applying IFRS Accounting Standards, aiding in the creation of consistent accounting standards and helping users interpret financial statements. Its main objective is to provide useful financial information for decision-making by investors, lenders, and creditors. Consistency in accounting policies enhances comparability, trend identification, and the reliability of financial information.

Uploaded by

maheshbhusal145
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

The Conceptual Framework is a document issued by the International Accounting

Standards Board (IASB) that provides the concepts and principles for developing and
applying IFRS Accounting Standards.

It is not an accounting standard itself, but it helps:

• The IASB develop consistent accounting standards.

• Preparers develop accounting policies when no specific IFRS standard applies.

• Users understand and interpret financial statements.

Objectives of the Conceptual Framework

The main objective is to provide financial information that is useful to existing and
potential investors, lenders, and other creditors in making decisions .

These decisions include:

• Buying or selling shares

• Lending money

• Assessing performance of company

• Predicting future cash flows

Consistency means that a company should use the same accounting policies and
methods from one accounting period to the next when preparing the FS.

Why is consistency important?

1. Makes financial statements comparable across different years.


2. Helps users identify trends in performance and financial position.
3. Improves the realibility and usefulness of financial information.

Example: company uses the same simple line depreciation every year.
Qualitative information:

1. Customers are satisified with the service.


2. Employees have high morale.
3. The products is of good quality.

Quantitative information:

1. Sales increased by 15%.


2. The compant earns 50m profit.
3. There are 100 employess in the company.

You might also like