Conceptual Framework for Financial Reporting
The conceptual framework guides the development of standards. The framework does not impose. In areas not yet covered by standards, it offers guidance. The framework discusses alternatives available for various situations, useful to accountants in making informed choices.
Why this course
The conceptual framework is a crucial step towards building a solid foundation. It offers definitions of terms that almost exclusive to accounting, as well as useful insights in areas that may not have authoritative interpretation anywhere else. Without the pressure of compliance required in formal standards, the framework instead guides the development of such standards. In the same manner, the framework can guide one’s approach and understanding, and empowers the mind into exploring the reason and logic behind certain principles, and why procedures are done in certain ways.
What you will learn
The course follows the order of chapters in the Conceptual Framework for Financial Reporting issued in May 2018. Of priority for students starting out in their studies, is the discussion on the elements of financial statements. The definition and nature of the elements are discussed. These elements are the components of the financial statements and groups transactions of similar nature and effect on financial position and performance. Also covered are the concepts on recognition, measurement, and reporting. A pervasive theme in the discussions is the qualitative characteristics of useful accounting information.