6) conceptual framework

6 conceptual - 6 Conceptual Framework The conceptual framework or statement of principles describes the accounting model that is used to underpin

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6) Conceptual Framework The conceptual framework or statement of principles describes the accounting model that is used to underpin the work that an accounting standard-setter does. The statements in the conceptual framework describe the standard setter’s view on: The activities that should be reported on in financial statements The aspects of these activities that should be highlighted The attributes that information needs to have to be included in the financial statements How information should be presented in those financial statements Conceptual frameworks can be prescriptive which mean that they describe the desired form of financial reporting, or they can be descriptive which means that they simply describe the current financial reporting practice. Conceptual frameworks are important because: They answer questions such as for whom the financial statements are prepared and what they expect or should expect from financial statements. They have a big influence on the way in which standards are developed, the accounting policies that companies choose, the nature of disclosure in financial statements and the concept of materiality. Many conceptual frameworks are similar but there are still differences. The IASB and FASB are developing a joint conceptual framework which will help with the convergence of standards. The
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This note was uploaded on 02/25/2012 for the course CHEM 1341 taught by Professor Compton during the Fall '08 term at Texas State.

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6 conceptual - 6 Conceptual Framework The conceptual framework or statement of principles describes the accounting model that is used to underpin

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