Conceptual framework and statement of the

While some phenomena are inherently complex and cannot be made easy to understand, to exclude such information would make financial reports incomplete and potentially misleading. It can be a single entity or a portion of an entity or can comprise more than one entity.

Thus, the financial statements presume that an entity will continue in operation indefinitely or, if that presumption is not valid, disclosure and a different basis of reporting are required. The IASB assesses costs and benefits in relation to financial reporting generally, and not solely in relation to individual reporting entities.

They will need to consider pertinent information from other sources as well. Financial information is capable of making a difference in decisions if it has predictive value, confirmatory value, or both.

These broad classes are termed the elements of financial statements. The predictive value and confirmatory value of financial information are interrelated. The qualitative characteristics apply equally to financial information in general purpose financial reports as well as to financial information provided in other ways.

Reporting such information imposes costs and those costs should be justified by the benefits of reporting that information. Faithful representation means representation of the substance of an economic phenomenon instead of representation of its legal form only.

Comparability enables users to identify and understand similarities in, and differences among, items.

Verifiability means that different knowledgeable and independent observers could reach consensus, although not necessarily complete agreement, that a particular depiction is a faithful representation.

Users need to be able to distinguish between both of these changes.

Information about the claims and payment requirements assists users to predict how future cash flows will be distributed among those with a claim on the reporting entity.

However, enhancing qualitative characteristics either individually or collectively cannot render information useful if that information is irrelevant or not represented faithfully.

This information indicates how the entity obtains and spends cash, including information about its borrowing and repayment of debt, cash dividends to shareholders, etc. The elements directly related to financial position balance sheet are: As the project to revise the Framework progresses, relevant paragraphs in Chapter 4 will be deleted and replaced by new Chapters in the IFRS Framework.

Conceptual Framework

Financial reports are prepared for users who have a reasonable knowledge of business and economic activities and who review and analyse the information with diligence. Qualitative characteristics of useful financial information The qualitative characteristics of useful financial reporting identify the types of information are likely to be most useful to users in making decisions about the reporting entity on the basis of information in its financial report.

Prudence is the exercise of caution when making judgements under conditions of uncertainty. To be useful, financial information must not only be relevant, it must also represent faithfully the phenomena it purports to represent. A reporting entity is not necessarily a legal entity. The usefulness of financial information is enhanced if it is comparable, verifiable, timely and understandable.

However, these are not considered a primary user and general purpose financial reports are not primarily directed to regulators or other parties.statement of the earnings and sources and uses o funds statements financial statement taken to gather, give the financial statement, taken to gather, give accounting picture at the first operation and financial position.

Example of Conceptual Framework February 11, admin One needs to build a theory by using an inductive model of thinking with logic as in grounded theory as Strauss and Corbin () suggested that the development of a theory is the culminating aspect of the study grounded in data gathered.

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() put it: The conceptual framework “sets the stage” for the presentation of the particular research question that drives the investigation being reported based on the problem statement. The problem statement of a thesis presents the context and the issues that caused the researcher to conduct the study.

Conceptual Framework for Financial Reporting, though both were identical when originally issued.

IAS 1, Presentation of Financial Statements, and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, also include definitions of materiality.

It is preferable that both sets of the Conceptual Framework converge. A Sample of Conceptual Framework with Statement of the Problem January 19, Alvior, Mary G.

27 Comments This article shows how a conceptual framework, along with the corresponding statement of the problem, is organized and written in a dissertation.

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Conceptual framework and statement of the
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