Current Development in Accounting Thought Question and Answer 2022

Running Head: CURRENT DEVELOPMENTS IN ACCOUNTING THOUGHT
CURRENT DEVELOPMENTS IN ACCOUNTING THOUGHTS
Name of the Student
Name of the University
Author Note

1CURRENT DEVELOPMENTS IN ACCOUNTING THOUGHT
Table of Contents
Answer to Question 1.................................................................................................................2
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Advantages of Conceptual Framework Advancement...........................................................2
Conceptual Framework and Legitimacy to Standard Setting Bodies....................................3
Conclusion..................................................................................................................................4
Answer to Question 2.................................................................................................................5
Introduction................................................................................................................................5
Discussion..................................................................................................................................5
Identification of Relevancy of the Fair Values or Historical Values.....................................5
Conclusion..................................................................................................................................6
Answer to Question 3.................................................................................................................8
Introduction................................................................................................................................8
Discussion..................................................................................................................................8
Reasons for Historical Cost remain as Accepted Method of Measurement...........................8
Alternative Measurement System..........................................................................................9
Conclusion................................................................................................................................10
Reference..................................................................................................................................11

2CURRENT DEVELOPMENTS IN ACCOUNTING THOUGHT

3CURRENT DEVELOPMENTS IN ACCOUNTING THOUGHT
Answer to Question 1
Introduction
The conventional accounting such as historical cost accounting helps in recording the
transactions that appears in the balance sheet as well as income statement in terms of
monetary amounts that reflects their historical cost. The historical cost has the principle,
which requires maintaining the records of the accounting at the original prices of transactions
and their values are retained in the processes of the accounting for serving as the basis of the
financial statements values. Hence, this assignment will discuss regarding the advancement
and the development of conceptual framework and legitimacy of standard setter.
Discussion
a)
Advantages of Conceptual Framework Advancement
Conceptual framework is known as the body of the fundamental approaches as well as
financial reporting. A conceptual framework fundamental is the underlying concepts, which
are used as the basis for achieving desired financial reporting objectives. It is the system of
the objectives as well as ideas, which leads towards creation of the consistent set of the
standards as well as rules. The accounting’s rules as well as the standards, sets the natures,
limits and functions of the financial accounting as well as financial statements. Therefore,
conceptual framework is developed because it helps to provide the framework to set the
standards of accounting, provides the basis for resolving the disputes of the accounting and
lastly, it helps in providing the fundamental principles that does not have to be repeated in the
standards of accounting. It is necessary for having conceptual framework because if the
existing set of the standards are absent then it will become impossible for resolving any type
of emerging new problem. It also helps for increasing the users’ understanding of financial