Assignment- Turnitin.docx - Abstract I would like to state...

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Abstract I would like to state out some arguments about the proposed changes of Discussion Paper in this assignment. There are three strong debates about the existence of specific words in definition of asset: economic resource, expected and control. Arguments about liability definition are: relevance between changes of details and business performance, importance of improvements and choosing either conditional or unconditional obligations. Disputes of the proposed recognition criteria are about: the higher consensus measurement, possible approach and whether to take uncertainty into account. Moreover, some of the proposed changes are suitable to be added in Conceptual Framework but some are not, based on my opinions. Introduction The Conceptual Framework is the target of, ideas for, standard purpose financial reporting. A conceptual framework is system or tool with several dissimilarities and contexts consisting proposals or plans and purposes or goals to create regular rules and standards. The feature, role and confines of financial accounting and financial statements are set by these rules and standards. Conceptual Framework is mainly aiding IASB in developing future IFRSs and reviewing existing IFRSs. Conceptual Framework gives more modernized, clear-cut, and finalised concepts to enhance financial reporting. It includes the denotation and recognition criteria for: income, expenses, assets, liabilities, equity. Changes in Asset Definition “The existing definition of assets is: a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.”(Discussion Paper:A Review of the Conceptual Framework for Financial Reporting,2014) “The proposed definition of assets is: a present economic resource controlled by the entity as a result of past events.”(Discussion Paper:A Review of the Conceptual Framework for Financial Reporting,2014) “The pro-active project staff has assessed requires that the economic resource should be present as it exists on the date of the financial statements as well as the entity’s right or other access that others do not have.”(Pro-active Paper on the Definition of an Asset,2007) I agreed as the assets are always recorded in every required period and the economic resources must be present or tracking the date recorded instead of in future. In order get more accuracy and more
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updated information in financial statement, present economic resources should be recorded. Using of future cash flows may lead to failure of reflecting current thinking of IASB.
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  • Spring '16
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